Lord Renton of Mount Harry: My Lords, that is precisely the Answer I expected from the Minister. He is quite right to regard the Olympics as an opportunity and not a threat; clearly that is so. But I hope he will agree that there are a number of what I would call customers—existing customers or future customers—of the lottery who are very worried at the potential diminution in the amount of money that will be available for them. For example, the Heritage Memorial Fund has said that it expects its moneys to fall from about £350 million a year to £230 million a year. Against that background and at this interim period of change in the lottery, could the Minister suggest to his Secretary of State two pieces of advice? First, that Ministers should stop interfering in the lottery as much as possible and trying to direct money to their favourite projects for which they have failed to get money from the Treasury; and, secondly, that if by chance the Olympics are overspent, that overspend will not be loaded on to the lottery.

Lord Davies of Oldham: My Lords, we certainly do not expect the Olympics to be overspent. The planning and investment that we are putting into the Olympics are to guarantee that the necessary resources are available. I must emphasise to the House that the Olympics are conceived of as a cultural as well as a sporting event. London outscored Paris because of the emphasis that we put on the cultural legacy from the Olympics and the part that that would play in demonstrating the rich culture and varied inheritance of the British people. Of course I accept what the noble Lord says, but I will not take one piece of advice from him to Ministers—about interference in the lottery—because I do not think that it is justified. When changes occur to the proportions distributed from the lottery, those changes are carried through due process and are not interference by Minister in quite the way that the noble Lord indicated. What I will take back to Ministers is the very important point which he makes that we must safeguard funding for culture, heritage and the other good causes.

Lord Sheldon: My Lords, I am very pleased to hear what my noble friend said about culture but is there not a problem with the Department for Culture, Media and Sport in that it comprises a bundle and that, because there is not much in common between each of those elements, there is a danger that one of them might take moneys from the other? I am worried that culture may be the loser here. I should like to have some assurance from him on that.

Lord Morgan: My Lords, does my noble friend agree that these criticisms are short-termist and misconceived because, as he said, the bid included a very strong cultural and heritage dimension? There will be a cultural Olympiad as well as a sporting Olympiad. In any case, surely culture and heritage will benefit enormously from the £2 billion plus that will come in. Are not these criticisms wholly out of place?

Lord Wade of Chorlton: My Lords, is the Minister aware that in placing the order with a company in Northern Ireland, which then gave the order to a company in China to manufacture the goods, production was stopped at a similar plant in the north-west of England that had produced the garments for the past 20 years? As a result, a lot of English people in the north-west, where manufacturing jobs are dropping at a tremendous rate, were put out of a job. Why do the Government not appreciate that the overall costs include not only those of the garments but perhaps the extra cost of losing jobs in the north-west of England and in the UK generally.

Lord Stratford: My Lords, this is a great big fuss over very little. We have probably the least corrupt political process in the entire world. The more that people try to score cheap political points, however, the more we underline public confidence in the whole political system.

Lord King of Bridgwater: My Lords, does the Minister not recognise that if he accepts the comment of the noble Lord, Lord Stratford, we will soon not have the least corrupt political system in the world. It is precisely because these matters should be vigilantly observed and monitored that we ever manage to maintain the standards that are so important to public life in this country.

Lord Goodhart: My Lords, is it not about time that the Government imposed a rule that not only were ex-Ministers required to consult the committee, but also to accept its recommendations in the same way that outgoing civil servants are.

Baroness Ashton of Upholland: My Lords, on behalf of my noble friend Lady Scotland of Asthal, I beg to move that this Bill be now read a second time.
	In February this year, the Government published a five-year strategy on asylum and immigration. Implementation of the five-year strategy is now underway. Most of the measures in the strategy can be put in place through changes to our existing processes and the immigration rules. This Bill covers those aspects of the strategy which require primary legislation.
	Migration presents undeniable benefits to this country. It is vital that economic migrants are able to fill the gaps in our labour market that cannot be filled from the domestic workforce, and that we maintain the valuable contributions that overseas students and visitors make to our educational institutions, the tourism industry and the wider economy. The Government will also continue to protect those genuinely fleeing persecution. However, we will not tolerate abuse of the system.
	The five-year strategy contains a programme of measures to make our immigration and asylum systems simpler, clearer and robust. There are four key elements to this work.
	First, we will introduce a new, points-based system for those coming to the UK to work or study. We have consulted widely to ensure that the system will be properly calibrated to target those workers whom we need most and that it will be straightforward for employers and applicants to use. This simplified system will be more transparent and objective, and robust against abuse. In line with the implementation of the points-based system, we are removing entry clearance appeal rights. Those measures are covered in Clauses 1 to 14.
	Secondly, we are putting in place a new asylum process which will enable us to fast track almost all new cases and to maintain contact with asylum seekers at key points in the process, so that we are in a better position to remove those whose claims are unfounded. That will be complemented by our new strategy on refugee integration launched in March of this year. Related measures are covered in Clauses 12, 29 and 44.
	Thirdly, we will strengthen our immigration controls to make it harder for people both to enter and to stay in the country illegally. We are putting in place a fully integrated immigration control that is intelligence-led and uses new technology to check people before they depart for the UK, on arrival, while they are here and on departure from the UK. That will be supported by measures to target employers of illegal workers. That is covered in Clauses 15 to 42.
	Fourthly, the modernised immigration control and new asylum process, together with major new investment in frontline staff, will enable us significantly to increase removal of failed asylum seekers. That will be facilitated through our expanding programme of co-operation on removals with major source countries. Clauses 45 and 46 cover those measures.
	Your Lordships will be only too aware that following the events of 7 and 21 July, the Government undertook a thorough review of our immigration, asylum and nationality laws in the light of the heightened risk from terrorism. As a result, we have brought forward a number of additional provisions, which were added to the Bill during its consideration in another place.
	Those provisions will deny asylum to those involved in terrorism and speed up the appeals process in national security deportation cases. They will also extend our powers to withhold and to remove British nationality and the right of abode in the UK where an individual is found to have engaged in behaviour which creates a climate in which extremism can take root.
	I turn briefly to the detail of the Bill. Clauses 1, 3 and 11 are concerned with appeal rights for people in the United Kingdom who are refused a further period of leave or who have their leave curtailed. At the moment, many people in that position are able to appeal twice: first, against the decision which brings their leave to an end and, subsequently, against a decision to enforce their removal from the UK. Clauses 1, 3 and 11 replace that system with a single appeal at the removal stage during which the appellant can challenge any earlier decision which gave rise to the decision to remove them from the country.
	An exception is made for people who have previously been granted leave in recognition of their need for protection. The provisions in Clause 1 will ensure that whenever there is a decision to withdraw refugee status, there will be a discrete right to challenge this decision. Clause 1 will also allow the Secretary of State to provide discrete rights of appeal against decisions to curtail or to refuse to vary other categories of leave. Those categories will be designated in secondary legislation.
	Clause 4 removes the full right of appeal against refusal of entry clearance for work and study routes. That policy was set out in the five-year strategy and was a manifesto commitment. Appeal rights will be focused on cases that raise fundamental issues of rights and protection. Full appeal rights will be maintained for people who are refused entry clearance as a family visitor or a dependant.
	The introduction of the points-based scheme will ensure that the rules for entering the UK to work or as a student are clear and transparent. As was said in another place, the withdrawal of appeal rights will form part of the wider programme of work to implement the points-based system.
	Clause 5 limits the right of appeal against refusal of entry clearance or leave to enter if someone fails to provide a medical report or certificate when required. It will have no effect on the appeal rights of someone who provides the requested report, whatever its contents may be. I will explain the purpose of Clause 7 later alongside other provisions which have been inserted in the Bill following the July events.
	Clause 9 prevents appeals from being abandoned due to a grant of leave when the appellant may wish to continue with his or her challenge. Clause 13 ensures that a person who has complied with the terms of his leave shall not be committing an immigration offence during any appeal against a removal decision brought in the UK. A key provision is to tackle effectively illegal working by punishing those who use workers who are not legally allowed to seek paid employment in the UK.
	Clauses 15 to 24 create a new civil penalty for employers of illegal workers and set out how the scheme will work. In particular, Clauses 15 and 16 set out the circumstances in which a penalty may be issued to an employer found to be using illegal workers; the requirements that employers must fulfil to be able to prove that they have taken reasonable steps to assure themselves that employees are entitled to work in the UK; and grounds—

Baroness Ashton of Upholland: My Lords, I am grateful to the noble Baroness for raising that point. I had planned to do that specifically in my closing remarks. Perhaps I may deal with it then. The noble Baroness is right that we need to do everything that we can to prevent the kind of illegality that we have seen in those circumstances.
	As I indicated, there are also grounds on which an employer can object to the issue of a civil penalty, so there is a range of circumstances in which employers will be brought into this legislation, which I am sure that noble Lords will wish to discuss. Clause 19 requires a code of practice to be issued covering the criteria to be used in determining whether a penalty should be issued and the amount. The maximum amount to be paid per employee would be £2,000. Clause 21 creates a new criminal offence of employing a person knowing that they are not legally entitled to work in the UK. It provides that the maximum penalty for conviction following indictment is two years' imprisonment and/or a fine.
	Clause 23 requires a code of practice to be issued specifying how employers avoid contravening the Race Relations Act in carrying out their duties to avoid liability under the new scheme. We are clear that those provisions do not give employers licence to discriminate against employees or potential employees on the grounds of race or nationality. The Bill makes a number of amendments to existing legislation to facilitate the enforcement and transparency of the immigration and asylum systems. In order to improve our immigration control, in addition to tackling illegal working, we will introduce measures to enhance the data capture powers of the border agencies and enable greater inter-agency co-operation to support an intelligence-led approach to border control.
	Clauses 27 allows immigration officers to require passengers who present biometrically enabled travel documents to provide biometric information to allow their identity to be checked against the documents. That is necessary to support the global roll-out of finger-printing visa applicants by 2008. Clause 29 reduces the notice period given to asylum seekers and their families who cannot be fingerprinted on application. This supports the new asylum model by ensuring that claims are considered more swiftly.
	Clause 30 amends the list in the Immigration Act 1971 of documents that may be used to prove an individual's right of abode in the UK. It adds to the list ID cards issued to British citizens as proposed under the current Identity Cards Bill, and appropriately endorsed passports issued to British subjects with the right of abode here. Clauses 31 to 33 and 35 provide for the Immigration Service, police and Customs and Revenue officers to acquire passenger, crew, service and freight data from planes and ships in advance of their arrival in and departure from the UK. Clause 34 sets out the offence for failing to comply with a request for data. Clauses 36 to 39 cover who the information must or may be shared with and the purposes for which it may be shared.
	Clauses 40 and 41 allow authorised persons other than Immigration Service officers to search vehicles at ports for individuals and documents relating to possible immigration offences. This would allow the searches to be carried out by private contractors to enable immigration officer time to be used more effectively. The provisions would also allow authorised persons powers to search and detain people and documents. Authorised persons will include police constables and officers of HM Revenue and Customs. Clause 42 requires a monitor to be appointed to oversee the search functions of these authorised persons.
	Clause 43 allows local authorities to provide accommodation to recipients of benefits under Section 4 of the 1999 Act if they desire. The clause also prevents the creation of secure tenancies for Section 4 recipients across the UK.
	Clause 44 amends the statutory framework creating the refugee integration loan to reflect the change in policy announced in the five-year strategy granting refugees an initial five years' leave to remain.
	Clause 45 puts HM Chief Inspector of Prisons' voluntary oversight of short-term holding facilities and escorts on to a statutory footing, bringing it into line with the oversight exercised in respect of immigration removal centres.
	Clause 46 provides that where a person has breached the conditions of limited leave, or has obtained leave to remain by deception, leave is invalidated when he is served with the decision to remove him from the United Kingdom.
	Clause 47 allows the requirement for certain applicants under the British Nationality Act 1981 to be of full mental capacity to be waived where it is in the applicant's best interests not to enforce that requirement.
	Clauses 48 to 50 provide a power to prescribe procedures to be followed and fees to be paid when making particular applications under the Immigration Rules. They also enable, subject to the appropriate parliamentary scrutiny, the designation of particular services as chargeable to users. These measures will allow the Home Office, where appropriate, to recover more of its costs from the users of its services.
	Clauses 7 and 51 to 55 provide a concrete set of measures to tighten further our asylum, immigration and nationality controls in light of the heightened terrorist threat highlighted so graphically in July. Clause 7 will ensure the swift deportation of those who are a threat to the UK's national security. It will achieve this by requiring that the often lengthy challenges to our assessment that a person is a threat to national security take place after a person leaves the UK rather than before. There will remain an in-country right of appeal against deportation on human rights grounds unless the Secretary of State certifies that removal would not breach our obligations under the European Convention on Human Rights. Where such a certificate is issued the deportee will be able to challenge the Secretary of State's assessment of the human rights claim before removal. The clause therefore balances our responsibilities to abide by our international obligations with our responsibilities to protect the public.
	Clause 51 confirms that the power of arrest in deportation cases is available when notice of intention to deport is ready but has not yet been given to a prospective deportee. This will ensure that immigration officers and constables can continue to seek a warrant to enter named premises in order to search for and arrest a prospective deportee and serve him with a notice to deport.
	Clause 52 provides an interpretation of the 1951 Refugee Convention to make it absolutely clear that acts of committing, preparing or instigating terrorism or of encouraging or inducing others to do so will result in exclusion from asylum. Although the Refugee Convention already provides the necessary framework for denying refugee protection to those who engage in acts of terrorism, we consider that a more explicit interpretation of Article 1F(c) is required in order to clarify who falls within the scope of that exclusion clause. The clause reflects the provisions of relevant Security Council resolutions which set out the types of acts that are considered to be contrary to the purposes and principles of the United Nations.
	Clause 53 will replace an existing criterion for deprivation of British nationality—that the person concerned had done something seriously prejudicial to the vital interests of the United Kingdom—with the criterion that it is conducive to the public good to deprive a person of their British nationality. The proviso that the individual could not, by this means, be rendered stateless will continue to have effect, as will the provision for a right of appeal.
	Clause 54 will confer on the Secretary of State a power, subject to a right of appeal, to remove a right of abode in the United Kingdom where such a right derived from possession of citizenship of another Commonwealth country and it was deemed conducive to the public good to remove or exclude the individual from the United Kingdom.
	Clause 55 will require those seeking to acquire British nationality by registration to satisfy the Secretary of State that they were of good character before nationality could be granted.
	Clause 56 exempts immigration detainees from the national minimum wage in respect of work done in a removal centre. Exemptions will allow detainees to be provided with opportunities to engage in paid activity.
	We have made great strides already in improving our asylum and migration systems and in strengthening our border control. Implementation of the five-year strategy will consolidate these successes to ensure that we have effective, transparent and equitable migration processes which the public can understand and have confidence in. The Bill will provide the legislation for doing this. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Baroness Ashton of Upholland.)

Baroness Anelay of St Johns: My Lords, we support the main thrust of the Bill but there are some significant problems caused by it that we will need to debate in Grand Committee. I thank Amnesty for organising yesterday a comprehensive briefing for all noble Lords about the major issues that will need to be addressed.
	This is the third Bill on such matters since I became spokesman on home affairs a little over three years ago. It is the fourth Bill that the Government have presented. Last year, when we passed what the then Home Secretary described as the "final phase" of asylum reform—the plan to bring speed and finality to the appeals and removals process—I hoped he was right. But it has proved not so. The result is that the number of removals has fallen in five of the past six quarters. Only 14,000 failed asylum seekers, including dependants, were removed in 2004–05, which is 21 per cent fewer than in the previous year. If that was supposed to be the final phase, then this Bill is certainly something of an afterthought.
	Indeed, that was admitted with admirable candour by the Minister for Immigration, Mr McNulty, in Committee in another place, when he said,
	"that—for once—this Bill is not presented as the all-singing, all-dancing answer, solution and comprehensive retort to whatever is going on in the asylum and immigration world, as some of the others have been".—[Official Report, Commons Standing Committee E, 18/10/05; col. 25.]
	The problem is, of course, that in spinning the story that the Government were solving immigration and asylum problems with the sweep of a press release pen, they failed to grip the whole picture. So we now have what Mr McNulty described in Committee in another place as,
	"a legislative jigsaw puzzle".—[Official Report, Commons Standing Committee E, 18/10/05; col. 4.]
	Does the Minister agree that it is time now for consolidating legislation? Cutting and pasting together so many pieces of legislation and inserting new snippets of text means that it is very difficult to follow exactly what is happening. One has only to look at the drafting of Clause 1 to see how little clarity that brings to those who seek guidance on rights of appeal.
	The Minister referred to the Government's policy of managed migration. That could make a valuable contribution to our economy, our culture and many aspects of our society. As the Government recognise, uncontrolled immigration can have the opposite effect. Indeed, any policy of managed migration inherently recognises that fact by imposing a cap on migration by introducing an executive assessment of an acceptable type of migrant that is to be contained within the structure of a points system. A points system is a gateway to migration, but it is also one that slams the door shut on many.
	The problem is that the Government are making changes to the appeals processes in the Bill months—perhaps years—before they put the points system in place, let alone assess whether it is a success or not. The success or failure of so much of this Bill really depends upon the successful operation of the points system. We are being presented with the cart before the horse.
	I turn, first, to the section on appeals. My right honourable friend Mr Davis made it clear in another place that:
	"Although Conservative Members are minded to accept the Home Secretary's arguments on appeals, the decision hinges strongly on improvement in quality".—[Official Report, Commons, 5/7/05; col. 196.]
	Debates on the Bill in another place revealed concerns about the need to improve the quality of decision much more before we launch into the withdrawal of in-country appeal rights.
	We shall need to look in detail in Grand Committee at the clauses on appeals to check that they strike the right balance between an individual's rights and the needs of an effective administration. We will need to look carefully at how effective the initial decision procedure is in making that judgment.
	The Government should ensure that those who take initial decisions in asylum and immigration cases are thoroughly trained and expert. The quality of that initial decision-making still gives great cause for concern throughout this House and throughout the immigration world.
	The debates in another place have persuaded us that there is probably good reason to retain in-country rights of appeal in some narrowly drawn categories where people will be in the country having entered legally with leave. The disruption they face if they are forced to leave the United Kingdom could cause administrative problems and give rise to successful human rights applications in the courts and to compensation claims.
	I turn specifically to the question of the impact of the changes on students. Clause 1 removes the right of appeal against an adverse decision in relation to varying leave to enter or remain. That may hit genuine students. I give as an example a Chinese PhD student who is wrongly refused leave to extend his stay by, let us say, three months to complete his work or attend a graduation ceremony. He would have to go home to Shanghai and then institute appeal proceedings from there. Where is the sense in that?
	Students will also be adversely affected by the removal of appeals rights in Clause 4. Government figures have shown that 25 per cent of international student appeals against visa refusals are successful. I have raised in debates on other matters the fact that problems may arise when temporary staff are sent to places such as Chennai to deal with log-jams of applications and they simply do not have the expertise to be able to make appropriate initial decisions.
	We should remember that immigration decisions such as the refusal of a visa remain on the record of would-be migrants. A UK visa refusal could surely prejudice any future visa applications made by a prospective student. The United Kingdom should be doing all it can to attract international students for economic, social and cultural reasons. We are at one with the Government on that. The fact that United Kingdom universities attract the best and brightest students from around the world is a key factor in the world-class standing of our higher education.
	The Government's argument that as other countries do not offer such rights of appeal, there is no problem for us in abolishing our own does not wash with me. If others choose to adopt a flawed system, that is their choice. We do not have to follow suit. There is a danger that if one takes away students' right of appeal when initial decisions are often flawed, the consequence may be that the quality of those initial decisions will become even more flawed and arbitrary. If no appeal is permitted, there is the clear danger that the person making that decision will be less likely to think that it is a priority to get the decision right.
	Why have the Government not considered delaying the removal of the right of appeal until there has been a demonstrable improvement in decisions made by entry clearance officers? It is right that the Government should be asked in Grand Committee to look again at their proposals to abolish the right of appeal for students. We will table amendments to enable that debate to take place.
	I turn to employers and their role. The Bill promises new sanctions against people who employ illegal immigrants. I welcome the Government's intention wholeheartedly. The exploitation that has developed in some sectors of our economy in recent years is a disgrace to a civilised society. But sanctions are already available; they have just not been used. It is already illegal under Section 8 of the Asylum and Immigration Act 1996 for an employer to hire a person subject to immigration control where that person lacks permission to work in the UK. There have been only 24 prosecutions in the past seven years under that legislation. Why not more? In Committee, we will need to probe why the Government wish to abandon a criminal offence, which has a maximum fine of £5,000, and replace it with a civil fine of a maximum of £2,000. It will be important for the Government to demonstrate that the civil penalty will have a greater impact on the evil that they rightly seek to eradicate.
	It is also important that we get the balance right. We must ensure that employers can comply with the requirements and face a penalty only when they are culpable of trying intentionally to hire migrants who have no legal right to work in the UK. There may be risks that employers, not least because of the heavy burden imposed on them to check documents, will be reluctant to employ people whom they think might be subject to immigration control. That could result in an increase in discrimination in employment in spite of the good intentions behind the Clause 23 promise of a code of practice to guide employers.
	The Government added significant new clauses in Committee in another place in response to heightened and justified concerns about terrorism. The Government have been open and consultative during the summer about the way in which they introduced those clauses in another place. I make no complaint that approaches were not made directly to this House; the consultation was carried out in the correct way at the correct time. We will have our opportunity to contribute during the passage of this Bill. I also welcome the constructive approach taken by the Minister, Mr McNulty, on Report about the role of this House in debating these matters. He said:
	"I agree with those who suggest that it would be nice if the other place were to have a detailed discussion on that point"—
	the terrorism point—
	"reflecting our discussion in Committee rather than today's truncated debate".—[Official Report, Commons, 16/11/05; col. 1066.]
	Truncated, it most certainly was. We will ensure that there is time to have a proper, constructive and supportive debate on those matters.
	I give the House my commitment that we will use Grand Committee productively to ensure that, above all else, the impact of the myriad of measures throughout the Bill is balanced by a good dose of humanity and good old-fashioned common sense.

Lord Dholakia: My Lords, I thank the Minister, the noble Baroness, Lady Ashton, for explaining the provisions of the Immigration, Asylum and Nationality Bill. I am glad that the noble Baroness has the lead responsibility because experience has confirmed that she is prepared to listen and effect changes where appropriate. We are delighted to do business with her.
	Immigration and asylum issues are fairly emotive. Despite the nature and effect of various immigration and asylum legislation—this is the fifth effort in 10 years—the circumstances surrounding them remain fairly contentious. We have never disputed that every country has a right to determine its immigration policy, and the United Kingdom is no exception, but we are looking for justification of the present system. Where is the abuse that makes us remove the appeal system? We are told that present legislation is a by-product of the Government's five-year strategy on asylum and immigration and its purpose is to make migration work for Britain. We have no dispute with that. Economic migrants have helped to make Britain one of the richer countries in the world, economically and culturally. There remains a positive economic benefit from managed immigration to fill the demand for skills and labour that are in short supply.
	For that reason, we should concentrate more on the economic benefits of immigration. Let me spell out the reality in Britain today. Home Office research shows that immigrants, including refugees, are a net benefit to the community to the tune of £2.5 billion. Treasury figures suggest that economic growth would fall by 0.5 per cent over the next two years if migration to Britain ceased. Visitors from outside Europe spent £6.8 billion in Britain during 2002. There are 11,000 overseas teachers working in British schools. In higher education, over 33,000 out of 140,000 staff are from overseas. Overseas students spend more than £3 billion a year on fees, goods and services.
	We are told that it is necessary to radically reform the administration of the Immigration Service to secure public confidence in the system. It is here that we need to demonstrate leadership. The culture and operational policies adopted by the Home Office are notoriously inefficient, a point well made by the noble Baroness, Lady Anelay. This is not helped by political interference and target-driven policies. Nowhere is this more explicit than in the operation of our asylum policies. The Home Office has failed to provide a service that is efficient, effective, timely and fair for all. By any standards, the decision-making on asylum application is poor. While nine of 10 asylum applications are initially refused, 20 per cent of cases that go to appeal are successful. For some countries, the rate of successful appeal is over 40 per cent. This indicates a very high error rate in initial decisions and poor levels of training of caseworkers and interview staff. This is not helped by political pronouncements that result in "a culture of rejection".
	We have seen race and immigration issues being exploited during general elections. The attempts by politicians to "get tough" on asylum in order to appease certain sections of the public and the media have shamefully made a political football of this issue. It has taken some years for the Government to differentiate between asylum, which is essentially a human rights issue, and migration, essentially a social, economic and political issue.
	So what is before us? There are some good things in the Bill—for example, the measures to deal with those who employ people working illegally—but we need to ensure that we have powers to tackle the worst and most exploitative employers, and that we are not simply targeting the employees. Since 1996 the law has provided for the prosecution of employers of workers who are not permitted to work. Clauses 15 and 26 now introduce a civil penalty for employing people who do not have the right to work. In reality, we now have employers who are expected to act as agents for the Government by undertaking stringent checks, thus undertaking the role of policing immigration controls.
	There is a very low level of successful prosecution under the existing offence, which again was underlined by the noble Baroness, Lady Anelay. It may be that criminal standards of proof are difficult to obtain, but there is hardly any evidence of more investigations, more prosecutions and more successes. How many enforcement officers are working at present and are there any plans to increase the number? If criminal sanctions have not worked, what difference will a civil penalty make?
	Then there are the bad parts of the Bill. Here I give notice that measures such as the restriction on the right of appeal will receive no favour from us. On the one hand we are told that it is the Government's policy to recruit students from overseas, but at the same time the Bill will remove rights of appeal against refusal of entry clearance from British posts abroad from anyone except people who are applying to visit specified family members, or who are applying as dependants of specified individuals. In reality this means that students, workers, working holidaymakers and ministers of religion will not be able to appeal. Where is the justification? Where is the evidence that points to abuse by these categories of applicants?
	Does the Minister accept the findings of the independent monitor, that file samples in 2002 and 2003 indicate that 28,000 applicants were wrongly denied rights of appeal in those two years? The Home Office obviously has a lot of explaining to do. When I sat as a magistrate, I was told that a decision is always better when one is aware that there is a higher authority able to scrutinise that decision. I spoke earlier about the contradiction in government policies. Nowhere is this more obvious than in matters relating to overseas students.
	Let us talk about the Prime Minister's initiative, launched in 1999, to attract 50,000 extra international students into higher education by 2004–05. Then let us look at what the Home Office is proposing in this Bill. Clause 4 will remove the right of appeal for students and others who are refused a visa. Then, we have Clause 1, which removes appeal rights in applications for leave to remain. The implications of these two clauses are very serious indeed. Those who have entered the UK legally are turned into illegal over-stayers as soon as their application for a variation or extension of leave is refused. I accept that the Government's new clause prevents them being prosecuted while an appeal is pending against removal, but the reality is that the process outlined and the time factor involved makes law-abiding applicants into unwanted entrants. What an indictment against a country that prides itself on its educational opportunity, which so influences democratic values in other countries. I look forward to the contribution of my noble friends Lady Sharp of Guildford and Lord Wallace of Saltaire on this issue. More importantly, I am looking forward to the contribution of the noble Baroness, Lady Warwick. Between them, they have repeatedly raised the concern of the academic world and the plight of the universities to attract overseas students.
	I have repeatedly searched for an explanation and the only case that is advanced is that the "system is overloaded". That was the argument advanced also in 1992. Let me quote what was said then. I thank Keith Best, the director of the Immigration Advisory Service, who was able to find this quotation from a debate in the other place. It was said:
	"When a right of appeal is removed, what is removed is a valuable and necessary constraint on those who exercise original jurisdiction. That is true not merely of immigration officers but of anybody. The immigration officer who knows that his decision may be subject to appeal is likely to be a good deal more circumspect, careful and even-handed than the officer who knows that his power of decision is absolute. That is simply, I fear, a matter of human nature, quite apart from anything else".—[Official Report, Commons, 2/11/92; col. 43.]
	Those were the words of the then shadow Home Secretary, the right honourable Member for Sedgefield, Mr Tony Blair.
	One matter of serious concern is that the legal aid provisions interact with the Bill. The Government have indicated that they would not charge individuals for advice but would charge advisers. There is a warning from the Select Committee on Constitutional Affairs. Lawyers deciding whether applicants face human rights concerns should not have to gamble on funding decisions. We note that Section 30 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 is amended by Clause 44 and that loans could be made for refugees on limited leave to enter or remain. However, this is of no help to refugees who are likely to be sent back to countries such as Zimbabwe with its appalling human rights record. We often stress that asylum seekers should be allowed to work. Her Majesty's inspector of prisons and others have come to the same conclusion. It seems strange, therefore, that those who work in immigration removal centres need not be paid the national minimum wage. Here is a recipe for the detention centres to employ cheap labour. We should ensure that there are safeguards so that asylum seekers are not exploited.
	We have also stressed the need to repeal Section 9 of the 2004 Act, which denies all support to failed asylum seekers and their dependants. Pilots are being run at present, but local authorities have already voiced their concern, especially around compatibility with the Children Act. We ask for the assurance that the Government will not delay the repeal of that section.
	I come to my concluding remarks. The Government's desire for a single appeal can be achieved using existing powers. It is misleading to say that people will still have a right of appeal against removal when they will have it only when they have left the country. Home Office decision-making is often poor. One-third of appeals against refusal of leave succeed, even with the current levels of scrutiny and precedent setting by the courts. Rather than removing appeal rights, decision making needs to be improved and subjected to greater scrutiny The rights at stake are important—the right to be with spouse and children, the right to continue business in which at least £200,000 has been invested, the right to continue employment or a profession, rights to pursue an education or training. The opportunity to do all those things will be lost if people have to leave the country for the appeal against removal to be heard.
	There will be out of country appeals. Given what is at stake for appellants and sponsors, appeals will be lodged from abroad. Hearings in such cases are costly and complex and it is harder to do justice when the appellant is not present in court and cannot give oral evidence. Claims for compensation and redress will arise. Other people, depending on their situation and the country to which they are returned, will effectively be kept out of any appeal by the provisions.
	If the Government insist on taking new powers, then they must redesign the clauses so that there is a broader in-country appeal that anticipates the consequences of removal, and not base their new proposals on an appeal right available only to those who have left the United Kingdom.
	In conclusion, immigration is not just about a numbers game; it is about human beings desperately seeking to improve their lives from poverty, persecution and despair. We in turn enhance our civilised values by helping them. That is the acceptable face of Britain I want to see.

Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend in another place. The Statement is as follows:
	"I should like to make a Statement on benefits uprating in the context of the Government's continued fight against poverty, and our ambitious programme to renew our welfare and pensions systems.
	"I shall place full details of the uprating in the Vote Office and arrange for figures to be published in the Official Report. I can confirm that most national insurance benefits will rise by the retail prices index, which is 2.7 per cent, and most income-related benefits will be uprated by Rossi, which is 2.2 per cent.
	"From next April, retirement pension will go up by £2.20 a week for single pensioners and by £3.55 a week for couples. When we were elected the pension was just £62.45 for a single person—from April it will be £84.25 for a single person and £134.75 for couples. That is a real terms rise of 8 per cent.
	"Next year the guarantee credit of pension credit will rise in line with earnings, so that no single pensioner need live on less than £114.05 a week and no couple on less than £174.05 a week.
	"The threshold for the savings element of pension credit will be uprated so that it remains equal to the basic state pension. This means that a typical single pensioner will now gain from pension credit with an income of up to £158.75 a week, while a typical couple will gain on income of up to £233 a week.
	"Nearly 3.3 million pensioners are now in receipt of pension credit, with an average weekly award of around £43. We are reaching more people and ensuring that they get their entitlements—over 900,000 more households receive pension credit than those previously in receipt of the minimum income guarantee.
	"Following the introduction of pension credit around 2 million pensioner households now qualify for more help, or qualify for help for the first time, with their council tax or rent. And from this week, pensioners can make a single phone call to claim all three of pension credit, housing benefit and council tax benefit.
	"By targeting resources at the least well off pensioners, we have succeeded in lifting nearly 2 million pensioners out of absolute poverty. We are now spending £11 billion extra each year on pensioners, with almost half of the extra spending going to the poorest third. If we had instead merely increased the basic state pension in line with earnings, then just over a quarter of that extra spending would have gone to the poorest third—who would have been £30 a week worse off than they are under these measures.
	"On average, pensioner households are now £1,400 a year, or £27 a week, better off in real terms than they would have been under the 1997 system—with the least well off third of households £1,900 a year, or £37 a week, better off in real terms. As well as tackling the dreadful legacy of pensioner poverty, we have also helped all pensioners and will continue to do so.
	"My right honourable friend the Chancellor confirmed yesterday that the winter fuel payment would be £200 for every year of this Parliament. He also announced that he would be setting aside an additional £300 million over the next three years, so that the Government's Warm Front programme can offer pensioner households on pension credit free installation of central heating, and all other pensioner households without central heating a contribution of £300 towards the costs of installing it. He also announced further help with the cost of insulation. I believe the whole House will welcome those announcements.
	"We have now reached the unprecedented position where pensioners are no more likely to be poor than any other group in society—a particularly remarkable achievement after a period in which earnings have grown so fast, thanks to the stability and steady growth we have enjoyed in the economy since 1997. We need now to introduce further reform to ensure that our pensions system delivers for future generations of pensioners as it is doing for today's.
	"We warmly welcome the broad framework of the Pension Commission's proposals and options published last week, and we believe they are the right basis for the consensus that we need. But there is still a great deal to be discussed and debated about the detail.
	"Yesterday I issued a challenge to the pensions industry. It believes that they can produce an industry-led model that will meet the Turner objective of enabling all people to save for a pension at low cost, but that will outperform the model proposed in the report. I have asked the industry to work up the details of an alternative approach by early February, ahead of a joint national pensions debate event between industry and government, when these proposals can be closely examined.
	"In the same way, as we embark on a major new consultation exercise involving every section of our community, we will be scrutinising the commission proposals and options, and debating the best ways to achieve the objectives that the commission set out and to deliver a lasting pensions settlement.
	"But if we are to meet the challenges of an ageing society and permanently eradicate poverty in retirement, we need also to address the inequalities during people's working lives. That is why our record in tackling child poverty is so important. It is why the Government are committed to supporting families in work and why our welfare reforms and our aspiration for an 80 per cent employment rate are so important, and why we want to see a modern, active and inclusive welfare state.
	"We have lifted over half a million children out of relative low income since 1997. Twenty million people, including 10.3 million children, are benefiting from tax credits. And the child tax credit, which will again increase by earnings, is benefiting six million families.
	"The standard rate of maternity allowance and statutory maternity pay will be increased by the retail prices index to £108.85 a week. Where the maximum maternity pay and child benefits for mothers at home with their first baby in 1997 was just £2,610 for the first year, it will rise by 2007 to £8,300—a real terms increase of £5,000.
	"In addition, the Work and Families Bill, which received its Second Reading yesterday, introduces a new entitlement to statutory paternity pay to enable a father to take time off work and receive statutory pay instead of his partner if she returns to work early. This gives parents greater choice in how they balance their work and caring responsibilities in the first year of their child's life. And for the sixth successive year, I can announce that we are freezing non-dependent deductions to relieve the pressure on low-income parents who are housing their adult children.
	"Work is the best route out of poverty. There are now more people in jobs than ever before—2.3 million more than 1997. Unemployment is at its lowest for nearly 30 years, with long-term youth unemployment 90 per cent lower than in 1997. In just 12 months employment has risen by 330,000 to 28.8 million and is the highest in the country's history. It has risen in every region and nation of the UK. The lone parent employment rate has increased by 11 percentage points since 1997 and there are now nearly one million lone parents in work, while the numbers of lone parents on income support has fallen by over 200,000 since 1997.
	"As my right honourable friend said yesterday, we are not going to abolish the New Deal. We will instead strengthen it, offering learning agreements for teenagers in eight areas of the country; extending the New Deal pilots to help lone parents back to work; and piloting personal action plans for those unemployed for six months or more. Our New Deal for Disabled People has seen nearly 75,000 job entries since its launch in 2001, with 200,000 disabled people helped into work through our total package of New Deal programmes.
	"We are also seeing very encouraging early results from our Pathways to Work pilots. In the first year of the pilots, the number of recorded job entries for people with a health condition or disability had almost doubled compared with the same period the year before. Their continued success has driven a significant increase in the proportion of customers leaving incapacity benefit in the first six months of their claim compared with non-pilot areas. Overall, on a national basis, this early success would be equivalent to something in the region of 150,000 IB claimants being helped into work each year.
	"This early success has underpinned our achievements in helping people off incapacity benefit, with new cases now down a third since 1997 and the first falls in the total count—down 41,000 in the year to May 2005.
	"In March this year, our Disability Discrimination Act completed the most far-reaching programme of disability rights legislation that any European country has put in place. It fulfilled our manifesto commitment to deliver enforceable and comprehensive civil rights for disabled people and represented a major landmark in enabling disabled people to live independently, fully recognised and respected as equal members of society.
	"Last week, on the International Day for Disabled People, we launched the new Office for Disability Issues. And from this week, the new Disability Discrimination Act 2005 has extended protection from discrimination to another 250,000 people.
	"But we are not stopping there. In January, our welfare reform Green Paper will go further in tackling exclusion from economic activity and independence across the working-age population.
	"In April, we will take further steps in breaking down the barriers that face older workers. The radical tax simplification that comes into play on A-day, as well as reducing the existing regimes down to a single regime, will enable people to draw their occupational pension while working for the same employer. Last year's Pensions Act continues to improve the rewards for those who choose to delay taking their state pension, even for only a short period, and in April we will see the first people to benefit from the new option of a lump sum, which could be worth more than £5,000. And later in the spring our White Paper will seek to lay the basis for a consensus on a lasting pensions settlement.
	"My right honourable friend also announced yesterday the change to the treatment of charitable, voluntary and personal injury income payments in income-related benefits. They are disregarded already in pension credit, pension age housing benefit and council tax benefit. To simplify the system further and encourage the work of charities, they will be disregarded from October next year in assessing eligibility for income support and jobseeker's allowance. There will also be a 52-week grace period for lump sum personal injury payments when assessing entitlement to income support, jobseeker's allowance, working age housing benefit and council tax benefit.
	"This year's uprating continues our commitment to promoting opportunities for the many, not the few. It contributes to our programme of radical reform that balances rights with responsibilities and offers everyone the opportunity to build a decent income for their retirement; and it takes another big step away from the legacy of pernicious poverty which we inherited and which we are determined should never return. I commend this Statement to the House".
	My Lords, that concludes the Statement.

Lord Lea of Crondall: My Lords, on the last point, is my noble friend aware of the remarkable progress that has been made? Page 6 of the Statement states that 200,000 disabled people have been helped into work through the total package of New Deal programmes. Indeed, it would appear from the early results of the pilots that the number of recorded job entries for people with a health condition or disability had almost doubled compared with the same period the year before. That is a remarkable step forward.
	As to the Turner report model on enabling all people to save for a pension at low cost—I emphasise "all people"—will my noble friend note that, given the initial sketchy thinking which has come out of the industry, some people are very sceptical that it will be able to meet the Turner criteria? We totally understand that the Government have to be a listening government, but the Turner criteria are quite stringent on universality given the scepticism about the financial service industry which, as all parties have noticed, has grown up in the past decade.

Baroness Warwick of Undercliffe: My Lords, I congratulate the noble Baroness, Lady Anelay, and the noble Lord, Lord Dholakia, on two powerful speeches. The Bill contains issues of concern to this House, and many in the education world outside this House will be grateful for the tenacity with which Her Majesty's Opposition and the Liberal Democrat Front Bench, in both this House and another place, have pursued the concerns expressed by universities and colleges on the Bill's impact on international students. I want to concentrate my remarks on that issue. I declare an interest as chief executive officer of Universities UK.
	I should also like to place on record my gratitude to the Government and to the Minister, my noble friend Lady Ashton, for their equally dogged pursuit of improvements to the immigration system. As a member of the Home Office's joint education task force, I can say that there has been a marked change in the vigour with which the Government are now working with the education sector to ensure that there is a much enhanced dialogue about the way to achieve these improvements. I salute the efforts of my noble friend in that endeavour.
	That positive climate, however, cannot disguise the fact that many in the education sector are deeply concerned about two provisions in the Bill. The first relates to the creation of a one-stop appeal system for leave to remain and variation of leave applications. There is no disagreement about the principle of introducing a simplified system, although there are some differences of view about how that should be achieved. The scheme proposed by the Government would allow unsuccessful applicants to appeal only once they have left the UK. The scheme also risks making unsuccessful applicants illegal overstayers if they learn the outcome of their application after their existing leave has expired. This cannot have been the Government's intention. I cannot believe it was deliberate. I think that the Government have recognised the problem, and I hope that when these issues are debated in detail in Committee an appropriate solution can be agreed upon.
	The other issue will be more familiar to the House. The Bill will abolish the right of appeal for international students, and others, who are refused a visa—or "initial entry clearance", to use the parlance. Universities UK, the Association of Colleges, the National Union of Students, the Immigration Advisory Service, the Council for International Education—UKCOSA—the Immigration Law Practitioners Association and the CBI all take the view that this measure in unjust. That point has been made forcefully by both the noble Lord, Lord Dholakia, and the noble Baroness, Lady Anelay, but I make no apology at all for making it again.
	Decision-making in entry clearance cases is often subjective, and often wrong. Universities UK has gathered a large number of examples of inappropriate and subjective refusals, all subsequently overturned. To give your Lordships just a flavour, one university told me that an applicant had been refused because:
	"The cost of your tuition, maintenance and accommodation is to be borne by your parents. Funding your education will impose an additional financial burden on them".
	That is a totally inappropriate, subjective judgment. In fact, the student was in receipt of a UK Government-funded scholarship covering the whole of his tuition fees, plus a maintenance award of £5,000 a year. The award letters were submitted with his application.
	Another university cited a case in which a student was told there was "no reason" for her to experience the British education system. She was refused entry because the entry clearance officer also had doubts about her ability to maintain and accommodate herself, despite the fact that she had a grant from her home government to cover all her costs.
	Several institutions have told me about applications rejected on the basis of academic judgment, which entry clearance officers are not qualified to make, and which is not an appropriate basis for refusal. One institution gave the following example:
	"Your proposed course of study is unrealistic because it is inconsistent with your previous pattern of study [and] previous job experience and does not represent a progression in your education . . . and you have been unable to give me a satisfactory explanation for this change of direction".
	The course in question was actually designed specifically to facilitate a change of career.
	I have quoted these examples at some length because I believe it is important that this House understands why the education sector believes that the right of appeal is so necessary. Indeed, although she is unable to be in her place this afternoon, I know that my noble friend Lady Blackstone, herself Vice-Chancellor of Greenwich University, would have added other examples, and would have echoed my concerns.
	Yes, there is a point of principle—that the right of appeal is important for reasons of natural justice where there is a possibility that an unfair decision might be made. But just as important, the right of appeal is important in this case and at this time because of the often poor and variable quality of initial decisions in entry clearance cases. We have evidence of that not only of the anecdotal kind which I have just described but also in the form of figures on the number of successful appeals. At the University of Sheffield, 90 per cent of visa refusals are overturned on appeal or before that stage. The Immigration Advisory Service reports at least a 59 per cent success rate. That indicates the scale of the problem. If 90 per cent of decisions are overturned, that means quite simply that a very high proportion of refusals are wrong. Universities, colleges and others protest against the measures in Clause 4. They protest not only because it would be unfair to deprive potential students of the right of appeal when they might have been refused entry for entirely inappropriate reasons; they protest because removing the right of appeal at this time would simply mean that many talented students who might have come to study in the UK will go elsewhere.
	The House has debated the importance of international students to the United Kingdom on countless occasions over the past few years. Those debates have been occasioned in large part by a growing appreciation of the benefits that international students bring the UK and of the increasing challenges we face in maintaining our position as a world leader in international student recruitment. In the context of increasing competition for international students and evidence from a great many institutions of a decline in numbers, the fear that large numbers of students who apply to the UK may be prevented from coming by poor decisions by entry clearance officers with no right of redress is deeply troubling. The Minister in her opening remarks talked of the new points-based system and will no doubt echo the views of the Minister of State with responsibility for immigration in another place that the Government plan to introduce this new system and that will solve the problems with the quality of decision-making. That may be so and indeed I sincerely hope it will be so, but the improvements have yet to be fully designed let alone implemented and proven to work.
	So I believe that Ministers should introduce the new immigration system and demonstrate that it works before legislating to remove appeals. As things stand, the appeals system is a very necessary constraint on a system that would otherwise fail thousands of potential students and indeed fail the universities who seek to attract them. I hope that the Government will be persuaded to reconsider.

Lord Wallace of Saltaire: My Lords, one of the advantages of specialising primarily in international issues is that I manage to avoid long and complicated Bills, particularly their Committee stages. I intervene in this Second Reading debate to touch on two matters: first the impact on students, which has already been raised by several speakers, and, secondly, to raise some questions on the international context. I, of course, declare an interest as a former member of staff at the London School of Economics who came into this issue when my own students complained to me about the imposition of student visa charges. I stress in particular that there is a problem for students who study for advanced degrees, which, according the regulations of the University of London, shall take between three and six years to complete. It is not easy to design nice, neat student visa lengths and requirements to go home to renew their grants if the students have flexible degree time that require considerable amounts of research. Such work often contributes to the research base of this country, particularly in the sciences.
	There are clearly underlying contradictions in government policy, which we have seen on previous occasions, between the Department for Education and Skills and the Home Office, which Ministers have admitted to me in private. The economic cost to the Government of administering the student visa system, narrowly defined, is emphasised. The economic value to Britain is often easily put to one side. My noble friend Lord Dholakia has already mentioned the contribution that staff and students from abroad make to British universities. They make financial contributions, contributions to research and, I have to say as a university teacher, to the quality of education which the rather parochial students we often have in this country get from being forced to defend their view of the world in the presence of students from many other countries.
	In this country we are extremely proud of the quality of British higher education. It makes a major contribution to Britain's invisible earnings. Indeed, on one occasion the London School of Economics won the Queen's Award for Export Achievement. The global ranking of British universities is outstanding compared to all other universities except for those in the United States. I should draw the Minister's attention to the Shanghai index on the world's social science institutions, in which, I regret to say, the London School of Economics was ranked only second.
	That suggests that we should be careful about damaging our ability to recruit top-class students from across the world. I wish to emphasise in particular students from China and south Asia. South Asia now provides extraordinarily good students, particularly in electronics, engineering and elsewhere but we are conscious that in Pakistan, Bangladesh and India the pressure on entry clearance officers for applications is intense and the likelihood of mistakes being made is high. We all recognise that there is a problem with the abuse of student visas and of overstayers, but we need to go beyond the idea that one system fits all.
	Applications from people who have been accepted by language schools and newly founded colleges appear to be treated in the same way as those offered places by top quality universities, after extensive investigation of their qualifications by the application officers concerned. That seems idiotic. Entry clearance officers should distinguish more clearly between institutions that have accepted students, and they should take the quality of the institution and the likely care of examination of the applications into account. The experience of the London School of Economics was that in the half a dozen cases last year when students were refused entry on first application, all their appeals were successful. In one case, the student had been refused because of mistakes made by the entry clearance officer in assessing the documentation. He had suggested that there were anomalies and inconsistencies in the applicant's father's bank statement, which on further investigation was shown not to be the case.
	University international offices do a great deal of work on this and there should be common ground between the Home Office, the DfES and the universities out of which we can reach agreement. University international offices, application offices and entry clearance offices could find a way to work together which would avoid damaging British universities. I am confident that common ground is to be found here, and I look forward to negotiations, if necessary.
	I wish to raise one other question about the Bill:—the absence of context on the international dimension. Immigration policy is, after all, essentially international. However, the assumption in the Bill appears to be that Britain still retains absolute sovereignty and that there is little need to co-operate with others. With great difficulty I found the clause—Clause 39(1)(d)—that refers to co-operation with,
	"any other foreign law enforcement agency".
	Immigration policy depends entirely on co-operation with other states. Furthermore, the United Kingdom is already caught up in an extensive and formal framework for co-operation on immigration matters with other states—in particular, within the European Union—which includes extensive and formal exchanges of information.
	For three years, I was chair of Sub-Committee F of the EU Committee. I recall the discussions that we had about Britain's formal opt-out from the Schengen convention and our informal opt-back-in to many of its clauses. I recall the existence of at least four common European databases, including Eurodac, the shared fingerprint database. I think that we should be told how far the provisions on fingerprinting in Clause 28 will provide or allow for fingerprints on file to be shared. We should be told with which other states they will be shared and under what conditions—I assume that in a number of instances they are likely to go on to Eurodac. Whether or not we need to amend the Bill, we are at least entitled to much more extensive information on all this. How widely shared will this information be and under what conditions and what constraints?
	My other puzzle relates to Clause 60. As always on matters that refer to the geographical extent of the United Kingdom, it is deliberately obscure and ambiguous. I am sure that noble Lords will immediately recognise the meaning of subsection (2). The clause states:
	"This Act extends to . . . an amendment by this Act of another Act has the same extent as that Act or as the relevant part of that Act".
	I think that means that where the Channel Islands and the Isle of Man have opted in to other bits of other Acts, they are allowed to opt in to the relevant bits of this Act and they can cherry-pick in opting out of the other bits as they like. Clause 60(3) goes on yet again to repeat the timeworn formula:
	"Her Majesty may"—
	but not "will"—
	" . . . direct that a provision of this Act is to extend, with or without modification or adaptation",
	to the Channel Islands and the Isle of Man. I want to mark again that on matters of immigration that is a fairly extensive hole in the Bill, when the number of people who travel in and out of the Channel Islands and the Isle of Man is growing as fast as the number of those who travel in and out of the United Kingdom. Your Lordships should not allow that to go through unremarked as these odd opt-ins and opt-outs so often do with parts of the British Crown which are not apparently part of the United Kingdom.
	I look forward to the Minister's reply. I look forward to being provided with much more information on exactly what the Bill implies in terms of the sharing of information with foreign governments. I certainly hope that during Committee there will be some useful exchanges about how we may resolve the question of good students applying and being denied because overloaded entry clearance officers may have made mistakes.

The Earl of Sandwich: My Lords, I warmly welcome the Minister to the new asylum Bill. She will provide relief to her colleagues who have survived so many already. I hope that she will give a clear answer to the noble Baroness, Lady Anelay. As her right honourable friend said, it is high time that the Government consolidated these Bills into one piece of legislation.
	This Bill feels different from its predecessors. The political climate changed after 2001, and public attitudes have moved on accordingly. There is less tolerance, and a new wariness. While I accept, in general, the need to tighten immigration controls, and especially to curb the agents of illegal migration and trafficking, I cannot agree with the continuous erosion of our appeals process, and the ignoring of internationally accepted detention rules. The blurring of lines between guilt and innocence is made even worse by the terrorism clauses, which I suspect will be opposed vigorously by Peers in Committee.
	We think of ourselves as a tolerant society, as the right reverend Prelate the Bishop of Chelmsford and the noble Lord, Lord Brooke of Sutton Mandeville, have reminded us. Asylum seekers in any society, however, incur more envy and insult than admiration—unless, of course, they win the Nobel Prize, or demonstrate the economic benefits that the noble Lord, Lord Dholakia, described. There is certainly no sign of a presumption of innocence, even in our own country. I remember that in Thailand, Sudan and Lebanon, many years ago, refugees and those helping them were bitterly resented. The UN had to take account of this, and sometimes fund local groups as well. The host country argument continues to be, "Aren't you lucky just to be here? Why should you expect any more from us?". This attitude is still alive in the UK, although it is more subtle and subconscious.
	That is why the 1951 convention lays down an obligation on the host country, recognising that incoming refugees or asylum seekers are the ones who have made the sacrifice, and not we, the recipients. We still have to learn lessons of hospitality in this country, especially in a climate of anti-terrorism which is bound to affect innocent refugees and migrants. In public transport, we are now advised to look more carefully at our fellow passengers and treat people with more suspicion. Minorities suffer when the majority feels threatened. The Government cannot claim just to be housekeeping when they tighten controls—they are also responding to a perception of threat, albeit from a tiny, invisible minority. In scrutinising this Bill, therefore, I hope that we will keep that in proportion.
	I have spent some time looking at detention, specifically the position of detainees in our so-called removal centres, and have some experience of Haslar and Oakington. The number in detention is rising, as the right reverend Prelate the Bishop of Chelmsford said. Information about detainees seems to be declining, and proper access to professionals is becoming more difficult. There are fundamental issues, such as time limits, presumption of liberty at bail hearings, written reasons for detention, and lost identity documents, all of which have been in previous Bills and remain a cause of concern. I am sure that they will surface in Committee. If we have to tighten the rules, let us simultaneously maintain and raise standards. The prison inspectorate visits under Clause 45, although long expected, are a welcome addition to the Bill.
	At Oakington last month, my noble friend Lord Ramsbotham and I were well received and impressed by the quality of some of the skilled staff. We were underwhelmed, however, by the official attitudes within a detention estate, the managers of which range in experience from private contracting firms to the Prison Service. No-one seems to care much about its future.
	Oakington is, or was, by immigration standards, quite a grand facility, much trumpeted during the last Bill as the Government's fast-track showcase. However, it is now operating at half capacity, with only about 130 inmates staying, in most cases, for very short periods. It has suffered much criticism in the media and successive inspector's reports for elements of racism and the inappropriate detention of children. My noble friend Lord Ramsbotham, who was not able to stay for the debate, wanted me to mention that unaccompanied and unaccounted for minors—now in the care of social services in Cambridge and many other towns under the Children Act 2004—are becoming a serious cause for concern. His suggestion is that some responsibility should be laid on area child safeguarding boards. This has been discussed in previous debates on safeguarding children. I hope the Minister will take note of what he said then.
	The management at Oakington has been engaged in remedial action much too late, since it is to close within months to make way for new development. No wonder enthusiasm is so muted and its performance obviously impaired. Detainees are shunted around like footballs, I was told. A Congolese woman, recently bereaved, had already been two days at Tinsley House and one day at Yarl's Wood before reaching Oakington. That is three centres in a week after suffering a serious experience. Torture victims are supposed to be screened by the Home Office, but some still reach detention before they are properly referred. There are others less fortunate. I heard of a recent case of a Jamaican refugee, a victim of gun crime, who was refused and removed to a certain death. Because of the speed of fast-tracking, we do not know the details of these cases, but we know that the system is imperfect and that the detention estate is failing them.
	On the positive side, the buildings are good and the involvement of health services and refugee agencies on the whole excellent. The inspectors have recognised this. But the Minister must agree that things are not working out and we are entitled to know what is in the Government's mind. It was impressed on us that conditions at Yarl's Wood are much worse than at Oakington—that is no reason for confidence—and that some of the best practice learnt at Oakington, such as the generally good relations between the legal NGOs and the managers, is already being lost before it can be transferred elsewhere.
	Coming to the Bill, I am concerned about the new five-year policy. If conditions improve in the home country within five years, refugees are expected to return. In my view, that is a new category of refugee. I understand that no legislation is needed for this policy. Yet five years of uncertainty gives refugees a less settled status than those who had indefinite leave. What will be the criteria of safety? The Bill refers to the cessation clause—1(c)(5)—in the 1951 convention. But the expert opinion at the High Commission for Refugees says that changes in the country of origin must be fundamental.
	There must also be serious concern about the monthly rate of removals, which is now supposed to exceed the rate of unfounded applications. We have already heard that reducing the caseload at this speed will affect initial decisions even more. Maximising returns through fast-tracking leaves insufficient time for legal representatives and for the adequate presentation of cases. I question the Minister's statement that the Government are in a "better position" with fast-tracking.
	Other measures under the Bill, such as stronger border controls, fingerprinting, electronic checks and more pressure on employers, present problems for NGOs and lawyers because there is a greater overall risk of criminalisation. Others have already mentioned Clause 52. There are further restrictions in the rights of appeal and many people are concerned about the variation appeals, especially in the case of students, under Clause 1. The Constitution Select Committee will look at appeals and the use of secondary legislation and will report before the Committee stage.
	I hope the Minister will recognise that, while strong feelings may be expressed, there is still considerable room for compromise by the Government when they give serious consideration to amendments, remembering that we are a complementary House and that many of these issues were not dealt with in Committee in the other place.

Baroness Flather: My Lords, I start by declaring an interest as a member of the Council of University College London. That gives a clue to what I shall speak about. By rights, at this stage I ought to follow the example of my noble friend Lord Brooke and say, "Ditto", but the desire to have my brief remarks on record is too great. Even though four noble Lords have spoken much better than I can, I still want to say my little piece.
	The universities are strongly opposed to the removal of the right of appeal from international students. At this time when all our universities are trying their best to attract students from all over the world, this will have a very damaging effect. How damaging it could be cannot be overstressed. As it is, we are losing ground in the world market. Now we have this, and we have to see how it will affect students who want to come here. Government statistics show that 25 per cent of international students who appeal against visa refusal are successful. The Immigration Advisory Service reports that 60 to 75 per cent of visa appeals that it handles for international students are successful. I suggest that if even 20 per cent of appeals are successful, it is right that there should be a right of appeal.
	The Home Office has suggested that unsuccessful students can simply reapply, a point mentioned by my noble friend Lady Anelay. We know that once an application has been refused, a reapplication will be looked at in a totally different way. The stigma of refusal will be on the papers, which will not only create a problem for a person coming to this country, but will affect a person's ability to go to other countries.
	The noble Baroness, Lady Warwick, made an important point about the ability of entry clearance officers to judge cases. That also worries me. Many years ago, when the Conservatives were in government, the right of appeal by short-stay visitors was taken away. At that stage, I made the point that we leave everything to the entry clearance officers who are the final arbiters of a person's fate. At that stage, it was agreed to introduce a monitor who would call in 10 per cent of files to see whether there was fairness, conformity and so on. But that is not good enough for students because calling in files to see whether the entry clearance officer has acted properly will be too late for most students.
	Some so-called institutions in this country are nothing but a letterhead. The noble Lord, Lord Wallace, touched on this point. We know that they run rackets. It is a racket that so many students come here and pay so much. The students do not start off on the road to coming here as migrants, falsely stating that they are students. They believe that there will be a course for them to attend. They come here, having paid £1,000 or £2,000 in their country of origin, which is an awful lot of money for them, but they find no course and no institution, except a letterhead or an address that is just an address. The point has been made that all the institutions in this country are not the same. If a student has applied to a reputable institution and has been accepted, surely that student should not be subjected to any problems. We need people from other countries in our universities.
	For so long, we have been influencing other countries through the people that we send back having been educated here. They take central positions when they return to their countries. I know that, coming from India. That has been happening for decades—centuries, even. It is extremely important that that sphere of influence that this country exercises is not lost. I hope that the matter will be looked at carefully. Clearly there is consensus on how damaging the provision will be to universities, but also to other further and higher education institutions. It will also be so damaging for students who want to come here. There may not be other places to which they want to go. I hope that the Minister will look at this carefully. I know that she is well versed in education issues and I am sure that this overlaps with her personal concerns.

Baroness Sharp of Guildford: My Lords, I, too, would like to address issues relating to the higher education sector. I should declare an interest as having been an academic for most of my life and still being a visiting fellow at the University of Sussex. I want to speak specifically about issues relating to students in Clause 1, which will remove the right of in-country appeal for international students who are refused extensions to visas; in Clause 4, which will remove the right of appeal to international students who are refused visa extensions; and in Clause 11, which will remove the rights of those whose leave to remain expires while they are applying for a visa extension to remain in the UK until consideration of the application has been completed. Those issues have already been mentioned by several noble Lords, notably, the noble Baroness, Lady Warwick.
	It is important to recognise how many applications are involved. In 2004, 51 per cent of the applications for appeal came from students; 30 per cent of all international students need to extend their visas for various reasons. Many of them need to do so because they are writing PhDs and need more time to complete their study. As my noble friend Lord Wallace, said, the length of time taken to write a thesis in this country is relatively variable, we hope. Our research councils put a lot of emphasis on completion within three years, but many students find it difficult to complete their research study and write it up within three years. Four and sometimes five years is a usual time for students to take to write a PhD. It is not predictable in advance. For that reason, students have to apply for extension to their visas when that happens.
	Many students come here initially for further education, to complete access courses for higher education and then want to go on from a further education college to a university and, again, need to apply for an extension to their visa. Sometimes a student wants to stay on for a graduation ceremony—for a matter of only three months or so. It is a little hard to have to go home and apply from their home country to come back for graduation. Sometimes students' initial visas are too short. Many students coming over to do PhDs are given only a one-year visa because it is thought that it is more appropriate for them to do a masters degree. Many universities require a masters degree as a preliminary to going on to a PhD. So there are natural reasons why students need to change or extend their visa requirements.
	I understand that the aim of Clauses 1 and 11 is to create a one-stop shop the system of appeal. In the first place, such appeals must be made outside the UK and, secondly, those whose leave to stay expires while they are in the process of applying immediately become illegal overstayers, with all that that implies. As an illegal overstayer, when they leave the country, their passport will be stamped. It will be on record that they have been an illegal overstayer and that will prejudice any future application for a visa. So it is a "Catch 22" situation.
	Clause 4, which will remove the right of appeal for all international students on initial entry clearance, with the exception of when they are visiting families or dependent relatives, again presents a difficult issue. The noble Baroness, Lady Warwick, gave several graphic instances of the subjectiveness of decisions made by entry clearance officers. The briefing that we have been given by Universities UK lists several other cases. She cited two personal cases that had come through the UUK system, but there have been cases where the entry clearance officer said that they did not believe that the student had applied for an appropriate course of study; where the entry clearance officer doubted that the student would complete the course or return to their home country; where the entry clearance officer believes that the cost of the course is not commensurate with the benefit that the students will receive; where the entry clearance officer believes that the cost of the course will impose an additional financial burden on the student's family—a case mentioned by the noble Baroness, Lady Warwick—or where the entry clearance officer does not believe that the course is appropriate for the student.
	As the noble Baroness, Lady Warwick, said, all those things are highly subjective. We hope that the process by which entry clearance officers judge those things will be improved. We are told that they are being trained and that it will be a much improved procedure. They have already been roundly criticised by both the National Audit Office and the independent assessor for how the system operates. We hope that they improve their procedures, but it is idealistic to think that their procedures will overnight move from being so subjective to being 100 per cent right. Indeed, in the other place, the Minister concerned, Tony McNulty, admitted that 100 per cent objectivity was a fool's errand—it cannot be. Why are we denying those students what I would argue to be natural justice? They should have the right of appeal.
	We recognise that there have been difficulties with some institutions—the noble Baroness, Lady Flather, mentioned this—that set themselves up as institutions of higher education, language colleges, or whatever. The Minister should recognise that bona fide universities have no objection to quality assurance processes being required. When universities of high quality say that they have a PhD student who needs an extra six months to complete a PhD, why should that be doubted by the Home Office? Why should it doubt the word of our universities in that way?
	I echo what has already been said. International students in this country give us a great deal. They help to provide the diversity, the liveliness and the vivacity of our higher education institutions. They bring in a great deal of income for our higher education institutions. The Government are fully aware of that. With the Prime Minister's initiative in 1999 to extend the number of international students, we have been successful and have been celebrating our success in bringing in more international students. But a combination of increasing visa charges, imposing very tough requirements on visa renewals and applications, and denying what seems to be natural justice, will not attract foreign students to this country. Some noble Lords have mentioned that we are falling back and losing students from China and south-east Asia. Knowledge of what is proposed in this Bill has already spread among international students. It will go through the international student grapevine and will do us no good whatever. These clauses should be amended and I hope that they will be.
	Finally, as someone who does not normally speak on Home Office Bills, I now find myself wearing my higher education hat involved with two Bills—the Terrorism Bill and the Immigration, Asylum and Nationality Bill. On both counts, there is great tension between the traditions of our traditionally tolerant British society, which over the years has provided a haven for refugees from many persecutions—from the Huguenots, as mentioned by the noble Lord, Lord Brooke, to those fleeing Hitler's death camps in the 1930s. As the right reverend Prelate the Bishop of Chelmsford said, because travel is so easy we have many people knocking on our doors who come from much further afield than before. I echo the words of the right reverend Prelate: we should aim to treat people from other countries as we would expect to be treated; we should accord them natural justice; and we should treat them with openness, transparency and humanity.

Lord Chan: My Lords, I support the policy of managed migration that underpins this Bill. However, the introduction of a new system where appeals will not be permitted will clearly create enormous problems that will have serious consequences that the drafters of the Bill had not thought about. Examples of serious consequences were brought to my attention with considerable passion in the past two weeks when I met members of the Chinese community—in particular, people working in the food catering industry and overseas students. I think that this is the first time that the Chinese community in Britain has come to Parliament to object to a government Bill. Clearly, the proposal to remove the right of appeal before improving the quality of decisions for visas to enter and remain in the United Kingdom is, as the noble Baroness, Lady Anelay, said, putting the cart before the horse.
	I am particularly concerned that Clause 1 removes the right of in-country appeal for workers in Chinese food catering and for students from China and south-east Asian countries who are refused extensions to existing visas. Clause 11 removes measures which ensure that applicants whose leave expires while they are making an application for an extension to their visa or appealing against the refusal of such an extension can legally remain in the United Kingdom until those processes are complete. The disadvantages of those two clauses have been well described and probed by a number of noble Lords. Clause 4, which removes the right of appeal for applicants wanting to work in the Chinese food industry in Britain and for students from China and south-east Asian countries who are refused visas to enter the United Kingdom, is yet another clause for contention.
	I turn now to the employment of foreign workers in food catering. The Chinese food catering industry began in the 1960s and 1970s when people from the New Territories in Hong Kong were invited to set up business here. That led to the development today of about 10,000 takeaway food shops and 5,000 Chinese restaurants. I understand that, together, they make an annual contribution of about £1 billion to Her Majesty's Treasury. That significant contribution to the national economy is in danger of being wiped out if this part of the catering industry is dismantled by the effects of this Bill.
	Clause 23(2)(b) gives the Secretary of State the power to issue a discrimination code of practice to ensure that employers do not discriminate on racial grounds when they apply the new law on employment of immigrants. The clause also gives the Secretary of State the right to consult,
	"such bodies representing employers . . . [and] such bodies representing workers",
	as he sees fit under this code of practice. In view of the large number of Chinese and other ethnic-minority-owned small businesses in this country, will the Secretary of State undertake to consult representatives of, for example, Chinese employers and Chinese workers in respect of the code of practice?
	Many Chinese food outlets and restaurants now change hands because their owners, who arrived in the 1960s and 1970s, have reached retirement age and their children have no interest in food catering. Noble Lords may be familiar with Ofsted reports which state that more than 70 per cent of Chinese children have obtained five good GCSE grades for the past decade. Almost all Chinese children attend universities or higher education colleges. No more than five in 100 have chosen to work in restaurants or food catering for almost two decades.
	In 1987, I conducted a survey of Chinese teenagers on Merseyside. Only five of the 110 children I interviewed wanted to work in food catering, although 98 of their parents were in Chinese food businesses. My report was given to the regeneration agencies that were involved in the renewal of Merseyside. The same findings have subsequently been reported in London, Manchester, Glasgow and Belfast. In 1997, the Fourth National Survey of Ethnic Minorities in Britain found that one in four Chinese men and women possess a university degree. That further reduces their interest in working in food catering.
	Because no more than five in 100 Chinese food outlets are taken over by the children of the original proprietor, most of them are sold—mainly to Chinese people from abroad. Usually, the person interested in buying the business comes from China, Hong Kong or south-east Asia and works in that outlet for a year before deciding whether to buy it. As the value of the small business is less than £200,000, these people need visas to work here.
	The removal of settlement rights under the five-tier points system will also make the United Kingdom unattractive to workers and prospective proprietors. High-skilled workers currently have a maximum of five years to remain in the United Kingdom without a break. The new Bill will break up that leave to remain into two parts of two years and three years. Therefore, high-skilled workers take a high risk when they decide to work in the United Kingdom because they are very unlikely to be able to settle here. Low-skilled workers will have no settlement rights and their family cannot join them. It is likely that workers in the food catering industry will be classified as low-skilled workers.
	If the Immigration, Asylum and Nationality Bill is passed, it could herald the death of the Chinese catering industry in the United Kingdom. When it is fully implemented, the only outlets to remain open will be expensive establishments vying for Michelin star status in our major metropolitan cities, particularly in the West End of London.
	I turn now to Chinese students from China, Hong Kong and south-east Asia. As other speakers have said, our universities consider them a significant group of international students that supply brains and finances to support our academic achievements. Ministers are aware that China currently provides between 70,000 and 90,000 students to the United Kingdom. But the increase made earlier this year to visa fees has deterred several thousands from coming, a point which has already been reported. A group of such students met me recently. They also complained that as legitimate visa holders, they seemed to be the only students on their campuses who, on arriving at their universities and checking into temporary summer accommodation, are the only ones who have to report to the nearest police station. They told me that no other groups of overseas students have to do this. That further sours their experience in the United Kingdom. Perhaps the Minister may wish to consider this practice.
	The implementation of Clauses 1, 4 and 11 will further reduce the number of overseas students. This will happen at a time when we know from the Independent Monitor of UK visas that the average refusal rate for student visas is 32 per cent—double that for non-settlement applications in 2003. There are 16 posts around the world that have refusal rates for student applications of more than 50 per cent, with a total refusal rate of 73 per cent from Kathmandu. Some 89 per cent of UK refusals are made for the reason that students are not studying at degree level by the time they intend to leave at the end of their visit or they will have completed their studies. An average student visa interview lasts for 10 minutes and the overall success rate on appeals made by the Immigration Advisory Service on behalf of students was 38 per cent in 2002–03 and 49 per cent in 2003–04.
	I look forward to hearing the Minister's response to the issues I have raised.

Lord Laird: My Lords, several concerns have been raised about the impact of Clauses 1 and 4 on international students. Universities UK and other groups, including the Immigration Advisory Service; the National Union of Students; the Council for International Education; the Association of Colleges and others, are opposed to measures that would abolish rights of appeal in entry clearance cases, and where students have been refused leave to remain.
	The objection is two-fold. First, it is felt that it is manifestly unfair to remove a right of appeal when the decisions taken, particularly in the case of initial entry clearance, are frequently found to be wrong or inappropriate. Secondly, it is feared that the removal of this appeal right would add to the impression already created by a number of recent measures relating to visas, that the United Kingdom is making it harder to obtain a visa to study in the UK.
	Universities have asked the Government to reconsider, particularly the measures in Clause 4. They point to evidence that it is becoming harder to attract international students, and that many of our universities are experiencing a downturn in international student recruitment. They also point to the enormous benefit international students bring.
	In the context of Northern Ireland, these issues are particularly pressing. The Queen's University of Belfast and the University of Ulster are both seeking to increase the number of international students they attract. That is important not only in terms of income from fees, but also for the contribution such students make to the intellectual resource of the university. In Northern Ireland the student population is largely homogeneous compared to other regions of the UK, so international students add much to the diversity of the student body, which is beneficial not only to the university but also to the wider community.
	Economically, the intellectual capital that international students represent is particularly important to Northern Ireland. As in Scotland, where the Government have recognised the need for skilled inward migration and helped to achieve that by focusing on attracting international students through the "Fresh Talent" scheme, Northern Ireland needs international students to help us achieve economic development. So in Northern Ireland, as elsewhere, this is the wrong moment to be putting barriers in the way of the efforts of our universities and colleges to recruit internationally.
	The Minister may argue that this is not what the Bill is about, but there is compelling evidence that if the right of appeal is abolished, hundreds and thousands of students will be turned away as a result of bad decisions by entry clearance officers. The evidence is that decision-making is so variable and frequently poor that the system badly needs the safeguard of an appeal mechanism. I shall give one example from Northern Ireland but I am sure the House will hear many others this afternoon. I am told of a student who applied from Cameroon to study at an English language school in Northern Ireland and was informed:
	"You have further stated that you intend to study this course in Northern Ireland so that you can also improve your English. If this is your aim and English is not your first language, I do not find it credible that you would choose a school in Northern Ireland to do these studies".
	The student was refused a visa in August this year. The case was brought to the attention of the Northern Ireland Department for Employment and Learning. The case was passed to the Foreign and Commonwealth Office for a response. The Foreign and Commonwealth Office replied by admitting that mistakes had been made and that the entry clearance officers were wrong to make judgments about the suitability of particular regions for particular courses. I am told that this is not an isolated example. Indeed, the impression that it is not is borne out by the report published in February this year by the Independent Monitor for Entry Clearance who said:
	"In relation to students I have found both in 2002 and 2003 that ECOs are effectively adding a number of additional requirements under the auspices of the requirements of intending to leave at the end of their studies and being able and intending to follow the course set out in the Immigration Rules. Specifically I find it unacceptable that students should be refused because they have not studied a subject in their own country/should have studied the subject more recently; because they could study the subject in their own country more cheaply; because in the opinion of the ECO they should study in a third country rather than the UK; because they do not 'need' to study and because they have failed to obtain a level of proficiency in their own country by studying there. All these reasons proliferate".
	In the light of these examples I have some serious concerns about the abolition of students' right of appeal, given that the entry clearance officer's decisions continue to be made on what appears to be an arbitrary and subjective basis.
	I understand that the Government hope that the introduction of a points-based immigration scheme will improve decision-making. I hope so, too. But the Government should bring forward plans to abolish the right of appeal in such cases when and only when they have proved that the safeguards offered by appeals is no longer necessary because no one is wrongly refused a visa. At the moment, appeals are very necessary to the credibility and fairness of the system. I hope the Government will think again.
	There are other concerns about the Bill—specifically the way in which Clause 1 operates. Clause 1 aims to create a one-stop appeal system in leave to remain cases. There is no objection to that. But the way in which the Government have chosen to achieve this will mean that a large number of unsuccessful applicants for leave to remain will become illegal over-stayers through no fault of their own and as a surely unintended consequence of the way the Bill is drafted. I hope that we will have time to examine this measure in detail in Committee and that the Government will address the problems with the current drafting.

Lord Avebury: My Lords, the noble Baroness, Lady Anelay, started this debate four and a half hours ago by entering a plea for consolidation. In that she was echoing the advice that we have been given by the Law Society, and that was the implication of several of the speeches we have heard this afternoon, such as that of the noble Lord, Lord Hylton, who said that this was the eighth measure that had been introduced since 1987. I was trying to calculate how many there had been since 1971 when I came into the House. It would certainly run well into double figures. When we last discussed the subject of consolidation, on the 2002 Act, I made an amendment partially to consolidate the 1971 Act and in particular Schedule 2, which has been patched and altered in most of the Bills since then over the years and is now to have a little more of its cornice knocked off in the repeals under this Bill.
	The Minister who replied then, the noble Lord, Lord Bassam, recognised that the case had been made out. He said that he could not proceed until,
	"the whole reform package has been perfected and put together".—[Official Report, 15/7/02; col. 1075.]
	That means that it will be put off for ever. I hope that when the Minister replies this evening she will be able to give us a little more assurance on the time scale for consolidation. In particular, she might be able to say whether the consultation has begun with the Law Commission, which would be the first step towards consolidation. Would the Government be prepared to agree to the consolidation of Schedule 2 if I tabled that amendment again as a first step towards a more comprehensive exercise?
	Every commentator from outside this House, including those who addressed your Lordships upstairs yesterday evening, has been unanimous in their criticism of the reduction of appeal rights. We all know about the disastrous effect that the Bill would have on the ability of the universities to sustain their intake of good overseas students. In particular we heard from the noble Baroness, Lady Warwick, but she is by no means the only one to have majored on this theme this afternoon. I want to quote only one letter which I received from Ms Helen Bagshaw, who is a student at Balliol College and pointed out to me—and I think that these were the figures given by the noble Baroness, Lady Anelay—that 25 per cent of student appeals against refusal of entry clearance in 2003 were successful and that where the applicant received professional help from the IAS in conducting the appeal, the success rate went up to over 60 per cent. But it is not only students who suffer from the low quality of initial decision-making on entry certificates. The noble Lord, Lord Chan, gave us a extremely good example in the case of the Chinese catering industry.
	This low quality has been highlighted by the National Audit Office and the independent monitor which was referred to by my noble friend Lady Sharp. The monitor, who addressed us upstairs yesterday evening, said that the use of subjective criteria, inappropriate reasons for refusal and frequent misinterpretation of evidence presented by applicants was a problem. Yesterday, she also said that it was very unlikely that entry certificate officers who were dealing with 40 cases a day, having very little guidance and insufficient training, would attain a good level of fairness and efficiency. As my noble friend Lord Dholakia said, in her current report of February 2005 she points out that 28,000 people had wrongly been denied rights of appeal in 2002–03 under the existing system, and her advice to Parliament was to consider this when, as she correctly anticipated, consideration was given to whittling down the rights of appeal still further.
	The one concession that was dragged out of the Minister, Tony McNulty, in another place was that the removal of appeal rights would not come into effect until the points system was fully in place, except for people under tier 1, the equivalent of the present Highly Skilled Migrant Programme. The new points scheme is not in the Bill, but it is not the simple single scheme that has been advertised. I also hope that the Government will find time to debate the report of Sub-Committee F, which did not find that points schemes were inherently superior to work permit systems and said that they were not best at meeting labour market needs because employers may not find what they need among people who are admitted because they possess some general set of attributes, rather than the specific qualities that are sought under the work permit system. Conversely, more people having a particular skill may be admitted than are needed to fill the jobs in the favoured categories. Until we see the small print we will have no way of knowing whether the subjective judgments of ECOs, and therefore the propensity for error in the system, will be reduced by the new scheme.
	My noble friend Lord Dholakia made specific mention of the evils that have resulted from Clause 9 of the Asylum and Immigration (Treatment of Claimants, etc.) Act. I wish that my noble kinsman Lord Russell was still with us because I am certain that he would have had something to say about the need to rescue families trapped in destitution as a result of the creation of a new category of 'failed asylum seeker with family'. The research which is now being conducted by Barnardo's demonstrates that Section 9 is wholly incompatible with the Children Act 1989, that the families affected did not understand the process, and that local authorities felt it was an attempt to shift the burden from the IND to local budgets. My noble kinsman said that the protection of the weak, in one of the 17th century phrases he always had ready to hand, was,
	"the keystone which closes up the arch of government".—[Official Report, 26/4/04; col. 659.]
	We shall do our best to restore that keystone, with a virtual plaque on it to his memory.
	The appearance of Clause 51, which arouses the concern of UNHRC as a,
	"skewed and imbalanced interpretation of the exclusion clauses",
	of the convention, reminded me of the debate we had on the order designating a very large list of offences of varying degrees of severity as being "particularly serious" and therefore automatically such as to exclude a person from being considered as a refugee under Article 33(2) of the convention. The UNHCR guidelines on interpretation require a high threshold to be placed on the interpretation of Article 33; that each case should be assessed individually on its own merits, and that there should be proportionality between the offence and the consequences of a refusal of asylum. Now the Government, having got away with breaching the guidelines on 1F(b), which excludes those who committed serious crimes from consideration as refugees, apply the same logic to 1F(c), which, as we have heard, deals with acts contrary to the purposes and principles of the United Nations, even though the Minister admitted that we had never been obliged to admit someone to the UK as a refugee because we lacked this provision in our law previously.
	We are greatly indebted to the Joint Committee on Human Rights, which has once again come up with important warnings just in time, and it is right about the iniquity of Clause 53, which allows somebody to be deprived of his British citizenship, even if born here, if the Secretary of State thinks, for example, that something he has said "justifies" terrorism. There are similar objections against Clause 54, under which a person may be deprived of his right of abode where the Secretary of State is satisfied that it would be non-conducive to the public good, a test which under the 1971 Act has never been subject to proper judicial review.
	Regarding Clause 52, which was dissected in some detail by the noble Baroness, Lady Stern, although the Security Council has indeed said in Security Council Resolution 1373 that acts of terrorism are contrary to the principles and purposes of the United Nations, the Government define "terrorism" according to the 2000 Act, extending to any act of violence against persons or property anywhere in the world. The encouragement or inducement of others to commit, prepare or instigate such acts, whether they were actual or threatened, would also bring the individual within 1F(c). This is not the restrictive interpretation required by UNHCR, and it would have caught many heroes of the past, from Harry Hotspur to Cromwell, Garibaldi and Kossuth through Adam von Trott to Nelson Mandela, Isaias Afewerke, Meles Zenawi and John Garang. All those were freedom fighters who would have been debarred from the protection of the convention if this clause had been in operation. We agree with the JCHR that in the context of this Bill a narrower definition of terrorism is needed, and the offences to be covered should be actual rather than inchoate.
	Finally, the UNHCR commends the Government for the arrangements being made for the inspection of detention facilities, but it deprecates the absence of an automatic right to a bail hearing, for which the Government made provision in Part 3 of the 1999 Act, but then reneged on in the 2002 Act. In fact, Clause 45 merely puts the chief inspector's existing role in detention centres, short-term holding facilities and escort arrangements within the scope of the Prison Act 1952, another area of the law in desperate need of consolidation. As has been said, the chief inspector does a fantastic job, but her periodic reviews of whole establishments do not remove the need for judicial review of individual detentions. The Refugee Children's Consortium drew our attention to the growing number of children in immigration detention—75 at the end of September, compared with 35 on 17 May 2004, as stated by the noble Lord, Lord Bassam, in a previous debate in response to an amendment of ours on the treatment of claimants Bill. He rejected our proposal for a systematic assessment of the needs of children in detention because the number was trivial and the vast majority were held for very short periods. But since the number has doubled over the intervening 18 months, and we still have no idea how long the children are being held, we need much better oversight of what is happening, and I hope this time round we shall be much firmer with the Government.
	On detention generally, although its purpose is said to be the facilitation of removal, one of our witnesses told us that the number being detained was twice the number being removed and that although the number of asylum seekers in detention had gone up to 1,695 two weeks ago, that had not resulted in a proportionate increase in removals. So the propensity to lock up asylum seekers has increased, and one of our witnesses upstairs said that it was a case of filling all the bed spaces available. On Sunday I spoke on the telephone to Miss Amanda Sibiye, a Zimbabwean who has been in Yarl's Wood detention centre since 8 April, and on hunger strike in protest against her detention since the beginning of November. She has lost 10 kilograms and the doctor from the Medical Foundation who examined her last week recommended that she be transferred to hospital, but the authorities declined to do that. A system that holds people in custody for eight months and ignores medical advice to release them is manifestly in need of regular judicial oversight, and we hope that if the Government are not prepared to implement Part 3 of the 1999 Act, they will come up with equivalent safeguards for vulnerable asylum seekers being held in detention indefinitely.

Baroness Ashton of Upholland: My Lords, none was taken. Perhaps in another sense it is sometimes easier to have some discussions without the Minister being present, and I appreciate that too. However, I should like to meet the organisations, and perhaps through the noble Baroness, Lady Anelay, and others, I can put that invitation to those organisations. I would welcome their contributions.
	I am grateful for the cautious welcome—but nonetheless there it was—to the Bill. I agree wholeheartedly with the sentiments expressed by the noble Baroness, Lady Anelay, and the noble Lord, Lord Dholakia, and I thank them for their kind words. It will be a privilege for me to do business with them in seeing this Bill safely on its way and recognising the important contributions that have been made. I have already said that, as always, I will reply later to any points that I fail to answer in my response— some because I simply do not have the answer and others because I am conscious of time and of not keeping your Lordships unnecessarily. Some clear, overarching issues have come to light. There is the whole question of in-country appeals, their scope and their process. Particularly relevant to your Lordships' House, not surprisingly, has been the whole question of students. A range of issues have come from those concerned about the employment clauses and the details of those clauses dealing with terrorism. Other issues raised include Europe, detention issues and children. I will try to deal with as many of those as I possibly can.
	The noble Lord, Lord Avebury, asked me about consolidation of this legislation. I gather that my colleague the Minister in another place said that there was a case for consolidation, a point to which the noble Lord referred. The Government are willing to consider it. I will, if I may, pursue that separately, because I am not familiar with how far we have got on that issue, and I will come back to the noble Lord. The noble Lord, Lord Hylton, as a precursor to that, asked about consultation before publication of the Bill. As I said in my opening remarks, this is implementing the five-year strategy on asylum and immigration and those points that require legislation. In the normal course of policy-making, the Government always seek to have those conversations with our customers and our stakeholders, and this strategy reflects that dialogue. I am sure that there will be organisations that do not agree with what is in the strategy, and some may not feel that they were consulted as much as they might have been. Again, my door is open to those who wish to come and talk about the legislation, but it is part of our work to have that ongoing dialogue. As I have already indicated, it is part of our manifesto commitment, and I am sure that all noble Lords present here and many organisations will be deeply familiar with what was in the manifesto.
	I am going to deal with this in three big chunks. I will start with appeals. The right of appellants will be protected by providing an in-country right of appeal, as I have stated, where a removal decision has raised human rights or asylum issues. I have listened to the arguments about the need to broaden and think further about the range of cases. I say straight away that in Committee I will look carefully at the proposals that might come forward. I am particularly inviting suggestions from your Lordships that might identify an alternative approach that creates what is central to this part of the Bill—an effective, one-stop appeals process but one that might confer in-country appeal rights on a wider range of cases. I was particularly struck by what the noble Lord, Lord Wallace of Saltaire, said about flexibility on students. The noble Baroness, Lady Sharp, made the same point, as did other noble Lords. I am willing to look at that. The objective is to create a one-stop appeals system. We are open—I am anyway—to looking more fully at what else we might do. I hope that noble Lords will approach the Committee in that spirit. I value very much contributions and discussions outside of the formal processes, and I am very keen to hear from noble Lords about that. It is within the principle of getting a one-stop appeals system in the best possible way. I hope that that covers some of the points which my noble friend Lady Warwick was concerned about. She was particularly concerned about students accidentally doing something illegal.
	Part of the rationale behind the provisions is to allow the refusal and curtailment decisions to be made simultaneously. Under Clause 13, someone who has been the subject of a removal decision will not be committing an offence during any time when an appeal against removal from inside the UK could be brought or is pending and will not be liable to have their passport endorsed on embarkation if they have complied with the terms of their leave. Anyone who has had leave refused or curtailed and embarks within any time that an appeal in-country could be brought, which is within 10 working days, would not be committing an offence. However, I shall look very carefully when we are in Committee to make sure that we have covered this point. It is not the purpose of the Bill to make people do something illegal accidentally. Its purpose is to deal properly with issues of immigration, asylum and nationality. We believe we have captured that properly but I am very comfortable about making a commitment to make sure that we are clear about it.
	The noble Baroness, Lady Anelay, was keen to make sure that we look at the points system in the context of the appeals system. We want to ensure that this works properly, so we are looking to phase in and phase out in some logical, coherent and consistent way. I hope that in Committee I can give noble Lords more information about how that will work and that that will allay some concerns. I think that the noble Lord, Lord Laird, will be interested in that point.
	Noble Lords have placed great emphasis on the quality of the initial decision-making, and gave lots of statistics and anecdotes. I will not even attempt to say which statistics are right or wrong, but in Committee I will give noble Lords what we believe to be the latest and most accurate statistics. That would be helpful; it may do nothing for the case to be made but at least we will be operating on the basis of the same set of statistics.
	A great deal of work has gone into making the process as good as it can be. The plan is to make the independent monitor a full-time position. We have regional operation managers operating overseas; we are making sure that there is managerial oversight and good quality control and, as far as possible, that decisions are taken properly. I will say more about students when I discuss that subject. I will be happy to talk in detail about the processes; the noble Lord, Lord Avebury, was keen that we deal with that properly.
	I recognise the issues about temporary staff, which the noble Baroness, Lady Anelay, mentioned. Of course we will make sure that all the entry clearance officers, whether temporary or permanent, attend training courses in the UK prior to taking up their assignments overseas. They are recruited from the Immigration Service and those with no previous experience of entry clearance will attend a three-week training course. Quite a lot of work is done to ensure that the decisions are all that they can be. However, we recognise that we have to do more, as the noble Lords, Lord Dholakia and Lord Hylton, pointed out. We must make sure that we demonstrate not only how good the work is already but how much better it can be.
	We are looking carefully at the way in which the processes will be introduced at the same time as developing the system. Therefore, we hope to deal with some of the issues that underlie noble Lords' concerns.
	The right reverend Prelate the Bishop of Chelmsford asked about unaccompanied minors and whether I would reiterate what my honourable friend said in another place. Tony McNulty said that former unaccompanied asylum-seeking children will have a separate right of appeal against refusal or curtailment of leave. I am happy to discuss that further with the right reverend Prelate, and we will raise it in Committee.
	The noble Earl, Lord Sandwich, talked about the role of safeguarding boards, and some noble Lords raised the issue of children more generally. I take a great interest in our children's policy and I need to discuss children's safeguarding boards with Ministers in the Department for Education and Skills to see whether that is appropriate. I am also delighted that the Constitution Committee is looking at appeals; it did me great service during the passage of the Higher Education Bill in helping me work out a number of different ways in which we might deal with appeals. I look forward to its contribution.
	I say to the noble Lord, Lord Dholakia, that we are making sure that people who appeal against removal on the grounds that it would breach their human rights can do this in the UK. That includes some of the categories that the noble Lord was concerned about, such as people connected with families, covered by Article 8 on the right to family life.
	Student workers and ministers of religion will continue to be able to appeal on the grounds that a decision breached their human rights or was racially discriminatory. I have already indicated the importance of the role of the independent monitor. That will be particularly important, given the point made by the right reverend Prelate and the noble Lord, Lord Dholakia: if you know that your decision will be reviewed, you make a better decision. The independent monitor will be there much more quickly than a review would be and will give rapid feedback on entry clearance. We hope that that will be an important part of the process.
	The noble Lord, Lord Hylton, asked what we were doing about the need for an independent source of country-by-country assessment. His concern was highlighted in the court judgment about people returning to Zimbabwe. The recent decisions did not criticise the Home Office's country of origin information on the general human rights questions in that country. The view was expressed that we should take a more active role in monitoring the treatment of failed asylum seekers once returned. The Home Office is considering whether there is anything that might usefully be done. But we return people only when they are considered not to be at risk and, as I am sure the noble Lord recognises, there are limits to what one can do in monitoring non-British citizens in overseas countries. More generally, the country of origin information provided by the Home Office is subject to the independent Advisory Panel on Country Information, which has made a lot of constructive comments over the past two years. It draws on reports by the UN High Commissioner for Refugees, NGOs, the US State Department, the Foreign Office and the media. It is an important part of the process.
	In concluding this part of my reply, I shall be looking at in-country appeals within the single appeal process and am willing to comment further on the phasing in and phasing out elements.
	On education, I disagree with my noble friend Lady Warwick in one sense. The debate implied that the appeals process was a real factor in the decision that people take in coming to this country. I do not quite accept that. I take the point that you cannot look at what other countries do and say that because they do it, it is right. Of course, countries such as Australia, New Zealand and Canada do not have an appeals process. I agree wholeheartedly with everybody who says we want to be the best in the world and to attract as many students as possible. That is great for our economy, for our institutions, and for exporting a bit of Britain. It is also very important for globalisation. As the noble Baroness, Lady Flather, said, it goes wider than universities. We do not disagree on the principle, but I am not sure that I accept that the appeals process is a factor, or much of a factor, in what people do. However, I accept that if we are to sell to overseas students, we need the best system possible.
	The number of applications for entry clearance to study has risen dramatically, from 99,540 in 2000 to 254,000 in 2004, excluding student nurses. Data from 2003, which includes student nurses, shows that the majority of applications were granted—an appeal-allowed rate of 28 per cent. That means that 1 per cent of students gained entry to the UK as a result of an allowed appeal.
	I was glad that the Chancellor announced a package to help the higher education sector benefit from the opportunities of globalisation. That was welcomed by Universities UK. I wanted to say to the noble Lord, Lord Chan, that a new UK-China university partnership scheme has been announced to support scholarships and to encourage academic exchanges and collaboration between centres of excellence in science and technology. I shall happily obtain more details for the noble Lord, but I wanted to make sure he was aware of that.
	I agree that we need to do more and everything we can to attract international students. It is important that we make sure we are the best. We think that the new objective tests will be better placed. I accept all the comments and anecdotes that noble Lords have raised—and I have heard many more—about what can go wrong. But we also hope that the relationship that we will develop between the institution and the student, and the sponsorship role, will enable many of those issues to be dealt with. The ambition is to ensure that we focus our resources better, and make sure that as many students come here, but we also want to ensure that students are genuinely coming to study. So the relationship between the institution and the student is critical, for all sorts of good reasons, not least the support that they can give the student.

Lord Hylton: My Lords, regarding detention, will the Minister consider a system so that magistrates could visit detention centres, perhaps weekly, to see whether the original detention was justified, whether it should be continued and whether each person that might get bail can get it? That would comply with suggestions made by the UN High Commissioner. I should have mentioned that point before, but I hope that it can still be considered.

Lord Anderson of Swansea: My Lords, I congratulate the noble Earl, Lord Dundee, on raising the issue of Croatia and its relations with Europe. I agree with him that Croatia is a European country by most definitions, culturally and geographically. It has made substantial strides towards incorporating the acquis. No doubt, as the process moves along, further such progress will be made.
	It is therefore important, as the noble Earl stressed, to see Croatia as a stabilising factor in part of the near-abroad of the European Union. He was also right to see the process of the accession of Croatia as part of the enlargement process as a whole. Although there may be hesitation about the European credentials, size and cultural credentials of certain other countries, there can be no such hesitation in respect of Croatia.
	Croatians do not see themselves a Balkan country, because of the pejorative connotation of "Balkan". They no doubt feel upset when they think of Metternich's suggestion that the Balkans begin at the Landstrasse from Vienna. They view themselves as central European. Having spent one afternoon in the cathedral in Zagreb, looking at the way that the different phases of architecture exactly paralleled those in western Europe, I can well see the reasons for that pride in being part of central Europe. One should therefore, perhaps, not talk so much of the enlargement of the European Union, more of a process of reunification.
	After Slovenia, in terms of its prosperity and culture, Croatia is next in line. If there are some who see, somewhere in the Balkans, the collision of the tectonic plates of the Austro-Hungarian and Ottoman empires, and if there is to be a divide there, Croatia is very firmly on the western, Christian, Catholic side. Hence the strong commitment of Austria to Croatia, not only in the early 1990s—some say with a somewhat negative effect—during the period of Alois Mock, and now with Wolfgang Schüssel with the rather murky events at the beginning of October.
	We must recognise, however, that, for that reason, Austria has been consistent. There have been suggestions that the decision to compensate and restitute German expellees from Croatia, which coincided almost exactly with the change in October, was part of a pay-off. My Austrian friends deny that, however, and say that the agreement was the end part of a long period of negotiation. It will be interesting to see how Her Majesty's Government construe it.
	The proper self-image of the Croatians is wholly European. There was a delay compared to other countries, similar to that in Slovakia under Meciar, because, under the Tudjman regime from 1992 to 1999, Croatia remained a poor Balkan country. During the last 18 months, however, there has, in my judgment, been a profound transformation, and under the same party as Tudjman, the HDZ. Prime Minister Sanader deserves considerable credit for that. There has been a real effort at internal reconciliation in Krajina and external co-operation with other countries in the region. There has also been recognition of the responsibility for war crimes in the 1990s and even with regard to the crimes against the Jewish population in the Second World War.
	I mentioned the volte-face of the ICTY in respect of Mr Gotovina. It happened, according to some commentators, between 1 and 4 October. It was a Damascene conversion in that context. However, others allege that our press has misconstrued what happened over that time and that the conversion was neither miraculous nor suspicious. I am not aware of any objective evidence of a major change in respect of Gotovina, and it may well be that Carla del Ponte did her office no good and may have created further difficulties for the War Crimes Tribunal in respect of Serbia. But what is done is done, and we have much that is positive to say about Croatia.
	The economy is in good shape. It had substantial growth last year, and tourist receipts are buoyant. However, it needs to move from an opaque to a more open and mature government structure and to open up its banking sector, particularly the financial services sector. The World Bank report in May this year concluded that the overall fiduciary risk was "significant", resulting from deficiencies in public financial management. Therefore, much needs to be done in the interim period. British American Tobacco recently threatened to withdraw because of the effect on investors there. The World Bank and the IFC survey ranked Croatia behind 134 other countries in the protection of investments.
	In terms of the simultaneous move towards NATO, Croatia is a member of the membership action plan, but there needs to be a substantial transformation of its armed forces to make it NATO-compatible. The last figure that I saw showed that three-quarters of its defence expenditure was spent on personnel and only 8 per cent on new investment. The personnel of its armed forces are extremely old.
	What can we in the United Kingdom do to bring Croatia closer to the European Union? What progress has been made? Some examples were given by the noble Earl. What is the current target date for accession? Clearly, the Croatian target date of 2007–08 is unrealistic, but in our contribution, we should look at the well tried instruments of twinning with local authorities, of more parliamentary exchanges, and of placements in the public service of particular help to the police and the army in exorcising the ghosts of the communists and the period of Tudjman. There are particular problems in justice and home affairs, the functioning of the courts and the quality of the judiciary. I know that Austria has been particularly active here.
	What efforts have been made to promote regional co-operation using the committed neighbours—Austria, Hungary and Slovenia—as mentors? Important, too, are regional infrastructure projects promoting regional agreements such as the agreement reached in November on the south-east Europe energy convention? What pressure will there be on Croatia to accelerate the integration of Serbs in the Krajina and also in the regranting of citizenship to Serb former citizens? Obviously, there should be help, too, to eliminate the non-tariff barriers in that region because it is important that the countries of the region work together closely.
	What are the benefits to the European Union of the welcome accession of Croatia? Negatively, it will help to reduce the dangers of Croatia and the region being used as a transit route to the European Union for drugs, people and arms smuggling by organised gangs. There is a long history along the Dalmatian coast, but Montenegro and Albania are probably worse offenders, certainly in terms of corruption. Positively, it is an opportunity to show to the region that, if a country does things that are right, it will be rewarded. I hope that Serbia and Montenegro, Albania and Macedonia will be able to co-operate with Croatia and in time follow Croatia along that route. Certainly Croatia's geo-strategic position and its increasing respect for minorities will help to stabilise a key and potentially vulnerable region for the European Union. The progress made thus far should be recognised with approval, and we should encourage Croatia to continue further along that route.

Lord Hannay of Chiswick: My Lords, two months ago, the negotiations for Croatia's accession to the European Union were begun, so the noble Earl's Question comes at an opportune moment to take stock of that important event and to look ahead.
	The process that led up to the opening of negotiations was far from straightforward or trouble-free. In normal circumstances, negotiations would have been opened some months earlier, but they were delayed in the light of the view expressed by the chief prosecutor of the International Tribunal for the former Yugoslavia—to which the noble Lord, Lord Anderson, referred—that Croatia was not co-operating fully with the task of bringing before the court one of its nationals who had been indicted for war crimes. That delay was much criticised in Croatia. It was even suggested that it could cause many Croatians to have second thoughts about the desirability of joining the European Union. I think that the EU was entirely justified in the position it took and in refusing to move ahead until the prosecutor was satisfied that she was getting full co-operation. I hope that the corollary to that position—namely, that should the prosecutor again find that she is not getting full co-operation, the negotiations will have to be suspended—is also true. I hope that the noble Lord, Lord Triesman, will confirm that is the case, as was indicated at the time of the Government's Statement to this House on the opening of negotiations. I say that out of no prejudice against the Government of Croatia or of any desire to see negotiations retarded or suspended. Quite the contrary: I am convinced that if the EU is clear and forthright on this point, the matter will never be put to the test.
	The significance of Croatia's co-operation with the international tribunal is a reminder—as is the wording of the noble Earl's Question, which speaks of peace and stability—of the need to look at Croatia's accession in a much wider context than just that of one country's application for membership. A mere 10 years ago, the guns had only just fallen silent on one of Europe's most sanguinary civil wars, because although the wars in the former Yugoslavia had some of the characteristics of wars between states, they also had many of the characteristics of wars within states—that modern paradigm which the international community is still having a good deal of difficulty in grasping and even more in handling.
	Europe's track record of that time was less than glorious, as was Croatia's. The Bosnian conflict had subjected both to enormous strains and many mistakes both of omission and commission were made. But my purpose in mentioning this is not to rake over the ashes of old conflicts but rather to register what a remarkable turnaround occurred soon after the low point of Srebrenica. In the next few years, not only did Croatia put behind it the temptations of interference in its Bosnian neighbour's affairs, but the European Union moved gradually but effectively into a central role in keeping the peace and securing a stable future for the Balkans. No European policy has contributed more to this increased influence and effectiveness than the conditional opening of the door to eventual accession by all the countries of the region. In that context, I would welcome an indication from the Minister on whether the EU is now working to ensure the return of the Serb residents of the Krajina who were forcibly expelled in 1995.
	It is odd how long it took to be fully understood what a powerful transformational instrument the prospect and, eventually, the actuality of EU accession can be. After all, it worked well in Greece, then it worked well in Spain and Portugal, and then it worked well with former communist countries of central and eastern Europe. Now it is beginning to work in the western Balkans. It has become one of the most significant demonstrations of what is often called "soft power". It is the glue that holds together the other instruments the EU possesses and deploys: peacekeeping troops, civilian police training and economic aid. It is what has enabled the European Union to play an ever growing role in securing peace and stability in its own backyard. Of course, it works only if the conditionality implied in the Copenhagen criteria for membership is rigorously applied and implemented. That will, no doubt, lead to some difficult moments, not just for Croatia, but for every candidate for accession from now onwards. It is in the interests of neither the European Union nor the citizens of the candidates for membership that those criteria should be fudged or applied in a haphazard fashion.
	When, following the rejection of the European constitutional treaty in the French and Dutch referendums, a dark shadow fell over the prospects for further enlargement, most people were thinking about the implications for Turkey when they should have been thinking just as much about the implications for the west Balkans. That was what made the decisions taken on 3 October to open negotiations with Turkey and Croatia so very important and why it is only fair to give real credit to Britain's EU presidency for standing firm and thus, for the time being at least, dissipating that dark shadow. No doubt further enlargement will remain a fraught subject in the European Union, never again likely to be as comfortably uncontentious as it was in the 1980s and 1990s. So we will need not for a moment to forget how much is riding on it and how damaging the consequences are likely to be if we turn away from it.
	Coming back from these wider perspectives to the candidacy of Croatia itself, it will be important to move these negotiations ahead purposefully and with determination on both sides. The European Union will need to avoid being distracted by its other preoccupations; Croatia will need to find the political will to overcome the problems that inevitably arise in such complex negotiations. I hope that this House and the All-Party Parliamentary Group on Enlargement, chaired by the noble Lord, Lord Dubs, will be able to assist in a modest way on both sides of that equation. It would be surprising indeed if Croatia was not to become the 28th member of the Union, and I, for one, fully expect it to do so.

Lord Giddens: My Lords, let me also thank the noble Earl, Lord Dundee, for initiating this debate on a topic so important to the future of the European Union and to the wider future of Europe itself. I start by congratulating Croatia and the Croatians because a couple of days ago Croatia won the Davis Cup. It was a remarkable achievement because there are only 4.5 million people in Croatia compared with the 60 million people in the UK and I believe we have not even got near to the final in the post-war period. The losing country in the final was Slovakia, which is also a new European state.
	About three weeks ago, I was in Santa Barbara, California, an idyllic little spot. I have to admit to the Minister, who is busy with his papers, that I gave up one of my roster nights in order to do so. Fortunately, he is no longer my whip—at least, I believe that he is no longer my whip. In Santa Barbara, California, there are some lovely second-hand bookstores. In one of them, I bought a book for a dollar, the equivalent of about 60p these days. It was called Inside Europe and was written by John Gunther. It was published in 1961. I see that the noble Lord, Lord Biffen, knows about John Gunther. He wrote a range of books over a fairly lengthy period. It was an extraordinary experience to read that book sitting on the beach in Santa Barbara. It brought home to me the enormity of the changes that have happened in Europe over some four decades. At the time that the book was written, in 1961, Europe was still divided. The author speaks of Germany as the fiery heart of Europe. At that time, the Berlin Wall had not been built. People were still commuting, mostly from the east to the west, but some from the west to the east. It was the time when, as the noble Lord, Lord Hannay, mentioned, there were dictatorships in three core European countries: Portugal, Spain and Greece. Some of the major European states were still colonial countries at that time. One of the interesting things about the book was that there was a mention of what was to become the European Economic Community, but it warranted only five pages in a book of some 500 pages.
	What advance has been made since then? Of course, one cannot say that the European Union is responsible for all the changes that have happened, but it is responsible for a fairly substantial number of them. I would like to echo the point made by the noble Lord, Lord Hannay, about the significance of enlargement. Enlargement is the single most important foreign policy tool of the European Union. It has created not only a zone of peace in Europe, but a zone of hope for societies that are outside the membership of the European Union. Compare that with the zone around the United States. If one looks at Central or Latin America, states in those areas have suffered from American intervention in previous periods, leading to civil wars and so forth, and many people have been killed—for example, in Guatemala—but the United States does not offer a model. It does not offer the same kind of possibilities for the future that the European Union does. My view is that, in spite of the problems that the European Union has suffered recently, enlargement should and must continue. It is crucial to the future of Europe and the future of the European Union.
	We tend to think of the Balkans as exceptional—I accept that Croatia might not regard itself as part of the Balkans—and we tend to think of it as historically a conflict-ridden area where a world war was initiated and where there is, apparently, a famous clash of civilisations, as Samuel Huntingdon so famously described it. But that view is wrong. I do not think that the Balkans are significantly more unstable than the rest of Europe used to be. The Balkans are a hangover from European history, rather than being an exception to it, because European history is the history of tribalism, division, ethnic conflicts and violence. One of the most interesting works on this issue is Mark Mazower's book Dark Continent in which he shows that the progress of Europe has not been an untrammelled, easy process of movement towards democracy. It has been a highly turbulent history, including its recent history and its very recent history, which was also mentioned by the noble Lord, Lord Hannay. We have to see the Balkans more as an extension of what European history used to be, rather than as an area specifically different from the rest of Europe.
	That is why it is so important to speak of the accession negotiations that have begun with Croatia. Of course, the opening of negotiations with Croatia was overshadowed, especially in the media, by the opening of negotiations with Turkey. I speak as a strong supporter of Turkey's potential accession to the European Union. I was a member of the so-called independent group on Turkey, which was headed by the ex-President of Finland, Mr Ahtisaari. We were all independent experts, although I was less of an expert on Turkey than on more general issues, but we came down firmly behind Turkey's accession to Europe.
	Croatia is a small country, as I said, but its potential accession is perhaps just as important as that of Turkey for the future of Europe and the future of the wider region. In a speech in Zagreb on 10 July 2003, Romano Prodi, who was then the head of the European Commission, said that by submitting its application, Croatia,
	"has declared that the long and trying period of war, division and nationalism is well and truly over".
	He reaffirmed the European Union's firm commitment to the integration of the Balkans as a whole into the Union. In that process, Croatia must be a vanguard country. It must show to the rest of the area that it is possible to have a country that was war-torn and caught up in the horrific conflicts, about which we know so well, that can make the transition to peace and economic development and be part of an effective European Union.
	As my noble friend Lord Anderson mentioned, some of the signs are good. I had a good look at the economic statistics for Croatia and they show that Croatia is already deeply integrated into the wider economy of the European Union—far more than any other state in that area, with the exception of Slovenia. That process is facilitated by the recovery of tourism in the country. On the other hand, we should not be complacent about that and nor should the Croatian Government—I believe that they are not. There are still strong currents of nationalism around. I hope that winning the Davis Cup will be a positive version of nationalism, not a negative one. There are still major divisions in the country. Support for the European Union has been waning recently, rather than rising. General Gotovina is still at large, although the Croatians have now promised full co-operation with the ICTY.
	In conclusion, like other noble Lords, I think that we must welcome that as a major advance in Europe. I should like to ask the Minister something different—more about the European Union itself, rather than just Croatia. Following the referenda and the stalling of some aspects of European progress, we must no longer simply ask, "What can the EU demand of the accession countries?"; we must also ask, "What can the potential accession countries ask of the EU?". We need reform in the EU and to push ahead with the European project. I have heard many members of the Government say that Europe should not be just a marketplace, but I should like to hear the Minister say in what respect it should not. I believe that Europe must be a political project. If it is to be a political project, there must be governance reforms in the European Union. I cannot see how those reforms can be not a bit like those proposed in the constitution. Potential accession countries will be watching to see how far the European Union can set itself on the right course. If there is to be a political Europe, what are some of the main contours that it should assume?

Lord Dholakia: My Lords, I, too, thank the noble Earl, Lord Dundee, for the opportunity to address issues affecting Croatia. I also enjoyed the contributions from the noble Lords, Lord Anderson of Swansea and Lord Hannay of Chiswick, and the detailed analyses provided by the noble Lords, Lord Giddens and Lord Biffen. When I added my name to this debate a number of my colleagues asked me when I developed my interest in Croatia. I looked back and I said that my association started when the Hansard Society placed a Croatian student in my office for work experience. Much of our talk was taken up with the might of English football against Croatia, and tennis—I am glad that the noble Lord, Lord Giddens, mentioned that—and before she could have one up on me, yesterday I sent her an e-mail congratulating Croatia's team on winning the Davis Cup: Croatia has one or two things to teach us.
	One knows the sad history of the bitter war as the former Yugoslavia broke up. We simply have to look back at the changes that have taken place since 1999. Before that, the country was in turmoil; civil rights and political rights suffered and, more importantly, the governing party was corrupt and the economy was in great difficulties. But let us look at the changes that have taken place in Croatia since then. Presidential and parliamentary elections have demonstrated a very new beginning. The country is now working towards being a part of the European mainstream by starting accession negotiations for membership of the EU in October of this year following a positive assessment by the tribunal's chief prosecutor, Mrs Carla del Ponte, on Croatia's full co-operation with the International Criminal Tribunal for the former Yugoslavia, a point well explained by the noble Lord, Lord Hannay. Croatia has been a candidate country since June 2004, after the European Commission concluded that she was a functioning democracy with a stable economy and a developed civil society.
	Croatia's progress towards EU membership was temporarily halted by the unresolved issue of the fugitive General Ante Gotovina. General Gotovina has been at large for four years following his indictment by the International Criminal Tribunal for the former Yugoslavia for war crimes committed during and after Operation Storm, when Croatian forces retook Serb-occupied areas of the country in August 1995. In all other areas of co-operation with the ICTY, Croatia has an exemplary record. She has complied fully with all the requirements made by the tribunal, including the transfer of all other indictees to The Hague and making available all witnesses, suspects and documents requested by the tribunal from the government.
	The case of General Gotovina was proving to be an obstacle and the chief prosecutor was of the opinion that the Croatian Government were not doing everything in their power to locate the fugitive and transfer him to The Hague. In order to solve the problem the government, assisted by the EU, have devised an action plan which lists point by point measures that they would take in order to dismantle the network that was assisting General Gotovina, and ultimately thus locate him. The ICTY has requested full co-operation from the Croatian Government. In turn, the government have been working towards that aim, but the outcome is still awaited. However, full co-operation has meant doing everything possible and exploring every avenue.
	At the European Council meeting held in Luxembourg on 3 October last, Mrs del Ponte finally reported full co-operation by the Croatians and the EU/Croatia accession talks were opened with a formal ceremony. The process of screening is well under way, and the government expect the negotiations on the first chapter to begin later in December, with other negotiations following soon after.
	Relations between Croatia and the UK have been constantly developing, and the removal of the visa regime, which has been referred to by a number of noble Lords, will additionally strengthen this link by adding to it many more dimensions. It will make much easier cultural, educational and business exchanges that are often hampered by the issue of visa requirements for Croatian citizens, not least because of the high cost. The visa regime has now become a counter-productive element in the relationship between the two countries.
	The fact that Croatia has opened accession talks with the EU has resulted in positive reactions in the rest of the region in south-east Europe. All the neighbouring governments have expressed their full support for Croatia's success in starting accession negotiations. This support has been steadfast from neighbouring countries ever since the normalisation of relations in the region. For the countries of south-east Europe, Croatia is seen as an example of what can be achieved if the criteria set by the EU institutions are met. The assessment of Brussels is that Croatia can lead and conclude the negotiations efficiently and relatively quickly. That in turn will send a positive signal to other countries in the region which at this moment are at various stages of the EU integration process.
	Similarly, it is in Croatia's interest to see her neighbours progress towards EU membership as soon as possible. What Croatia can offer to those countries is a transfer of knowledge on building democratic institutions. We should certainly welcome that. To that end, Croatia also remains committed to sharing with her neighbours the experience of these negotiations because she values highly the assistance she has received from the new member states which joined the EU in May 2004. By developing her economy and economic relations with neighbouring countries, Croatia can additionally strengthen them, both socially and economically. For every country in south-east Europe, each new step in the process of EU integration is an investment in peace and the stability of a region whose peoples have suffered so much over the past decade. They deserve to be part of the European family of nations.
	In the words of the Foreign Secretary, Jack Straw,
	"the beginning of accession negotiations is a historical moment and the beginning of a new era on Croatia's road towards the EU".
	This political reality is accompanied by a British initiative to establish a partnership between the UK and Croatia. The main aim of the partnership is to help Croatia become an EU member, and the focus of that assistance lies in the areas of justice and home affairs, along with the reform of public administration. The last is important because public administration carries through the whole process of the negotiations.
	Croatia is exceptionally well placed politically, linguistically and historically to play the role of agent, with the assistance of the UK, in the process of the development of democratic institutions in other countries in the region, especially in Bosnia, Herzegovina and Kosovo. The UK has a particular interest in seeing an end to the problems that emanate from the region—such as arms and people-trafficking—because they often end up in the United Kingdom.
	So what are my concerns? First, Her Majesty's Government decided to suspend a visa-free regime for Croatian citizens in 1999 following a wave of asylum seekers from Croatia—more specifically from the region of eastern Slavonia—all of them Croatian citizens of Serb nationality. Organised in groups, they claimed asylum in Scandinavian countries as well as in the United Kingdom. At its height, it was estimated in 1999 that the number of asylum seekers from Croatia to the United Kingdom was in the region of 1,200.
	The parliamentary elections in 2000, which brought about a landslide victory for democratic forces, marked a fundamental political change in Croatia. They also put an end to the reasons for which the Serb minority claimed political asylum in the United Kingdom and elsewhere. Soon after, the Scandinavian countries, which have a joint visa regime, abolished the visa requirement for Croatian citizens. There has not been another wave of Croatian asylum seekers in the Nordic and Scandinavian countries since then. There must be a message for us in that development.
	Croatia has made enormous progress in implementing internal reforms in line with European standards, including respect for minority rights and the return of refugees and their property. The Serbian minority representatives today are coalition partners in the right-of-centre government of Prime Minister Ivo Sanader.
	Croatia is not among the countries considered to be a source of immigration. The United Kingdom is the only member of the European Union—and indeed the only European country—which maintains a visa regime with Croatia. This visa regime has been maintained for some considerable time, but whenever questions have been put in the past the Government have said that the visa regime with Croatia is "constantly under review". The time has come to ask the Government: what is the conclusion of this review and when do Her Majesty's Government plan to publish the results? As the United Kingdom remains the only country with visa requirements for Croatian citizens, and as there has not been a single case of a Croatian asylum seeker in United Kingdom, or any other country for that matter, for years, surely the time has come to suspend the suspension and thus give further impetus and encouragement to Croatia in its efforts to join the European Union before the end of the decade.
	It would be so nice, both for Croatia and those who value its democracy, if the Government were to relax their visa regime so that students, cultural groups and others can enjoy our democratic values.

Baroness Rawlings: My Lords, I congratulate my noble friend Lord Dundee on securing the debate today. It has been most interesting, with important and knowledgeable contributions from all sides of the House.
	Slovenia's acceptance into the European Union last year and the start of membership talks with Croatia this October are, I am sure the Minister will agree, clear incentives for other states in the Balkans to undertake reforms and to apply for EU membership. If the negotiations with Croatia are successful, this will demonstrate to other governments in the region that a country deeply involved in the wars of the 1990s can, 10 years later, democratise and restore friendly relations with previous enemies, something which we on these Benches, and indeed your Lordships' House as a whole, fully support and encourage.
	Indeed, with Romania and Bulgaria's accession due in 2008, the remaining Balkan countries will be encircled by the EU and, unless they have a genuine prospect of membership, could face serious consequences. As the Economist highlighted on 3 November in an article entitled "Approaching Europe",
	"With some 22 million people penned inside a kind of poor Balkan reservation, inter-ethnic conflict, smuggling and organised crime would be certain to flourish.
	Compared with the cost of all that, EU membership might look quite cheap".
	There can be no doubt that the stabilisation of the Balkans and the accession of other Eastern bloc countries to the European Union require decisions of an historic nature and they provide a test that will determine whether the European Union succeeds in today's climate of globalisation and changing civilisation.
	We support the European Union in its capacity as the main donor of assistance to the Balkans. It has shown that it recognises progress by entering formal contractual relationships with qualifying states. Croatia and Moldova have both signed stabilisation and association agreements with the European Union. They seek to improve the existing autonomous trade preferences, and to provide autonomous trade liberalisation for 95 per cent of all the affected countries' exports to the European Union.
	We welcome Croatia as a member of the European Union. However, the legacy of the 1991–95 armed conflict continues to overshadow the former Yugoslavia as a whole. The region suffers from low standards of living and a serious brain drain. Understandably, frustration is still widespread. During the conflict, approximately 300,000 Croatian Serbs fled Croatia, out of which the UN High Commissioner for Refugees reports that 200,000 remain displaced. The Adventist Development and Relief Agency reported at the end of last month that although it had seen some increase in the number of families returning home in the past couple of years,
	"many returnees are still faced with a number of obstacles".
	In short, it stated that,
	"unemployment is very high . . . and many homes have either been destroyed, looted or are otherwise occupied".
	While the Croatian authorities have pledged to return illegally occupied property to returning Croatian Serbs, the repossession rate remains slow and many have lost their tenancy rights to socially owned apartments. There are claims too that the Croatian Serbs continue to face discrimination in employment when unemployment is a problem in itself. What discussions do the Government plan to have with the Croatian authorities on this issue?
	These problems affect not only returning refugees. Discrimination remains a significant issue also for the Roma population—a subject that is often raised in this House. Will the Minister outline what progress has been made there?
	The Commission's report of November 2005 stated that Croatia faced no major difficulties in meeting the European Union's political criteria for membership. We welcome this, as did the noble Lord, Lord Dholakia. However, human rights issues continue to cast a shadow over Croatia's application. Despite the Croatian Government's pledge to co-operate fully with the International Criminal Tribunal for the former Yugoslavia (ICTY), the authorities have adopted an ambivalent attitude. Negotiations have already been postponed once on these grounds. While the ICTY's chief prosecutor, Carla del Ponte, as mentioned by the noble Lords, Lord Anderson and Lord Hannay, considers that Croatia is now doing everything that it can to locate and arrest Ante Gotovina, a former army general, who has been charged by the tribunal with crimes against humanity and war crimes against Krajina Croatian Serb population during Operation Storm, would it not have been better if it had acted promptly in the first place? Will the Minister confirm that Her Majesty's Government will insist that less than full co-operation may well trigger a suspension of negotiations?
	I understand that corruption continues to be a serious problem too, although the legal framework to combat it seems largely to be in place. It is vital that these problems are resolved before accession to full membership is allowed, but the visa problem needs to be addressed by us, as several noble Lords have mentioned today.
	Croatia is not yet there, nor is the former Yugoslavia as a whole. Contention still reigns between Croatia and Slovenia over the Bay of Piran and the relationship with the State Union of Serbia and Montenegro, but slowly Croatia is taking great steps in the right direction. As highlighted by the noble Earl, Lord Dundee, in his eloquent opening speech, this direction has largely started to help stabilise the country and its neighbours, and will also help to promote constructive regionalism and aid the assistance to subsidiarity; "a zone of hope" as the noble Lord, Lord Giddens, described it.
	It is essential that we watch this process with care and continue with the tight tests for membership. At the same time, we should encourage and support applications like Croatia's as best we can in the interests of peace and stability, in a region that has already suffered too much from turmoil and strife.

Lord Triesman: My Lords, I was able to make a Statement on 11 October about the opening of negotiations with Turkey and Croatia, and I am grateful to the noble Earl, Lord Dundee, for giving us the opportunity to discuss Croatia on this occasion in much more detail. I thank him and all noble Lords who have taken part in this debate. I also congratulate the noble Lord, Lord Biffen, on his son-in-law's sagacity and political judgment. It is much appreciated, I can assure you. I do that just as wholeheartedly as I congratulate Croatia on winning the Davis Cup. I wish we had their weather—it might improve things generally.
	The noble Earl, Lord Dundee, has asked us an interesting and relevant question: what contribution will Croatia's accession to the EU make towards peace and prosperity in Europe? The noble Earl has indicated that Croatia can play a positive role in this important task. Others have echoed that thought—and I share that view—and he has linked it with a number of other key facts. He has also asked about the principle of subsidiarity and the importance of international exchange in the UK's own formulation of policy. I will do my best to answer all those points.
	It is worth saying to my noble friend Lord Anderson of Swansea, and to others, that Croatia is, as I think the noble Earl, Lord Dundee, said, potentially a stabilising influence, and I would like to explore that thought as well. When my noble friend Lord Giddens referred to a book he had recently acquired, it might have been just 1 per cent of its pages covering an area of such importance, but he is right to say that that percentage would probably be a great deal more now when we consider the peace and trade and other advantages that have come through Europe, replacing the serial violence of the continent. That is a great gain for all of us, and important to all the parts of the former Yugoslavia.
	Of the former Yugoslavia, leaving aside Slovenia, Croatia has moved the furthest towards EU membership. I take my noble friend Lord Anderson's point about its proud European history, and, as the noble Lords, Lord Hannay and Lord Giddens, have said, this European sense of belonging is important. Support for the EU did indeed fall after Croatia's accession talks were postponed in March, but equally polls have now shown that this has risen again, although not wholly, following the start of the accession talks on 3 October. That reflects what the noble Baroness, Lady Rawlings, said a few moments ago: it demonstrates to Croatia, as it does to others, the advantages of European Union membership, because it demonstrates the importance of the broader values and our commitment to keeping our word that, where progress is made, there are substantial advantages that we will ensure obtain.
	The noble Lord, Lord Anderson, also raised in a way the issue of identity—Balkans or central Europe, as I think he characterised it. I completely agree. The view is that Croatia is in central Europe, but it does not mean that it cannot also be designated as part of the western Balkans. Historically it has played both of those roles. Albania is negotiating a stabilisation and association agreement. Serbia and Montenegro and Bosnia and Herzegovina have recently, under the UK presidency, opened their negotiations for an SAA as well. Macedonia recently received an Opinion from the Commission on its formal application for membership. We are pleased as we look across that swathe that the countries in the region are beginning to take steps towards EU membership and starting to adopt the necessary reforms. The noble Lord, Lord Anderson, asks whether there has been sufficient progress and rightly makes the point that progress has been more significant over the past 18 months. I agree. In this process Croatia's progress towards EU membership sets an example for the other Balkan countries to follow. Croatia demonstrates that the EU will fulfil its commitments when the agreed conditions are met.
	So the most important thing that Croatia can do for the region is to continue its progress towards EU membership. Let me be clear though. That does mean sustaining full co-operation with the ICTY. I shall comment a little more on that in a moment. It also means continuing to reform its institution, and it means working to put in place the acquis. It will not be an easy task. The noble Lord, Lord Biffen, is right about that. It will be difficult. But I am convinced that the Croatian Government, with EU support, can achieve it. As it does so, I am also confident that Croatia will share its experience of the negotiations process with others in the region. The business of developing government structures and transposing EU law can be very challenging, but I am sure that Croatia's neighbours will be grateful for the advice they then receive.
	I know that Croatia has taken important steps to improve radically its bilateral relationship with its neighbours. President Kostunica visited Croatia last month, the first visit by a Serb Prime Minister, and this visit was characterised by a determination to work together as neighbours. Croatia should work with Serbia and Bosnia and Herzegovina to resolve their outstanding issues. Some of these—such as border management, which came up a moment ago—are of great importance to the United Kingdom. Many smuggling routes for illegal immigrants and trafficked people—trafficked women in particular—and for arms and drugs pass through the western Balkans on their way to the United Kingdom. We want to see the region develop coherent policies to combat that. Likewise, the countries must continue to work together to resolve legacy issues from the conflicts of the 1990s. In particular, they must work together on refugee returns to ensure that conditions are in place and encouragement is given to refugees—to all of the ethnic groups who want to return to the homes they fled in the 1990s.
	The noble Lord, Lord Anderson, and the noble Baroness, Lady Rawlings, have both raised that point. Rather than deal with it at great length, I just want to say that the UK Government have been consistent in the work they are doing to support the return to the Krajina region of Serb refugees who fled Croatia during the conflicts. We are pleased that many are returning. Issues of provision of housing and of overcoming discrimination in employment are central to the work that we are doing. It was right that the noble Baroness, Lady Rawlings, made those points to us a few moments ago. The Croatian Government, in respect of the Roma, have also recently adopted a national plan to address issues relating to Roma populations. We will be monitoring its implementation as I believe we have a duty to do.
	The noble Earl, Lord Dundee, and others also spoke about subsidiarity. I agree with the points that they made. We are scheduled to discuss that in more detail later in the month. But I would argue that we have a very strong and positive reason to support EU enlargement on its own merits. I shall come to those reasons in a second.
	In that context I thank the noble Earl, Lord Dundee, for highlighting that we must all learn from each other. Every country that joins the EU brings examples of good practice from which we can learn. As my noble friend Lord Giddens said, international interaction exists in many places—the EU, the UN and the Council of Europe, to name but a few places where experts and officials can come together to learn from each others' experience and to develop best practice. The noble Lord, Lord Dholakia, also rightly emphasised that point.
	Croatia fully participates in these activities in the UN, the Council of Europe and so on. I look forward to the experience and knowledge that Croatia can bring to the European Union across all policy areas, including penal policy. I assure noble Lords that the United Kingdom and Croatia will work together in committees on those issues. Naturally it is for the Home Office to report on that important work. I emphasise the point made by the noble Lord, Lord Anderson, that not only do we have the opportunity of learning but so does Croatia, certainly as regards the finance sector and armed forces' compatibility if there is a real intention to take part in the alliance. As ever, learning is a two-way street.
	Several noble Lords asked about Croatia's co-operation with the Hague Tribunal. The noble Lord, Lord Hannay, is right—co-operation is essential. It remains our position—I am sorry if I disappoint the noble Lord, Lord Biffen, in saying this—that impunity is not a viable alternative. The issue is central to Croatia's EU accession talks. The EU and the UK have consistently made it clear that full co-operation is absolutely essential. The positive report by Chief Prosecutor del Ponte on 3 October meant Croatia had met that condition, and in consequence the EU took the decision to open negotiations. Like the noble Lord, Lord Dholakia, I am not sceptical; I respect Mrs del Ponte's judgment and her independence. As the noble Baroness, Lady Rawlings, said, unless we deal with the matter, the legacy issues will always lead to financial and economic backwardness and other disadvantage. The Council has also agreed that if there is not full co-operation at any stage, it will affect the overall progress of negotiations and will be grounds for triggering suspension of them. It is absolutely crucial that Croatia maintains this level of co-operation. The UK and the EU will follow this question very closely. I welcome Prime Minister Sanader's commitment that Croatia will maintain full co-operation until Gotovina is in the Hague. This is important; it cannot be expressed any other way. The noble Lord, Lord Dholakia, emphasised that point.
	How are we assisting in these processes regarding Croatia? The EU and the UK have been generous supporters of the stabilisation and accession processes in Croatia. We are delighted with the values that have been created by the investment we have made. Between 2001 and 2006, a total of more than €500 million has been committed to Croatia under various EU schemes. The UK has itself generously contributed to Croatia through the Foreign Office's Global Opportunities Fund. In 2005, more than €615,000 was allocated to projects in Croatia. These are all designed to press forward the reforms essential for EU integration.
	The noble Earl, Lord Dundee, the noble Lords, Lord Biffen and Lord Dholakia, and the noble Baroness raised the visa issue. We continue to impose a visa regime on Croatian nationals. It is kept under regular review, not in the sense that a review report is published, but in the sense of our looking at the necessity for it. We shall not keep it for a moment longer than is strictly necessary.
	As regards enlargement in general, during our presidency we have seen progress not just by Turkey and Croatia but also by practically all the countries of the western Balkans. At a national level we are bringing forward a Bill to ratify the EU accession treaty with Romania and Bulgaria, which had its First Reading in your Lordships' House recently. I look forward to debating its later stages.
	These are real achievements which will affect the lives of millions of people and for which this presidency that we have enjoyed will be remembered. I thank the noble Lord, Lord Hannay, for his comments about the successes of the presidency. His work and the work of other distinguished diplomats paved the way for this progress. Support for enlargement is expressed on all sides at Westminster; it is a tradition in this country that is irrespective of party. It is clear from the comments that have been made that this Parliament remains a champion of enlargement. We support it with money and we support it with advice. We support it because we believe that it is right. It demonstrates in action not words the transformative power of the EU. That point has been made by a number of noble Lords, including and especially the noble Lord, Lord Hannay, when he talked about how it had been a spur to so much reform. The western Balkan countries and Turkey will present particular challenges that we will have to address. Enlargement Commissioner Rehn has stressed the need for the Commission to monitor candidates closely. EU standards must be scrupulously met. I entirely agree with that; it is a rigorous approach to conditionality and it must remain so.
	The issue of whether we are moving too fast is important. The noble Lord, Lord Biffen, suggested that. However, it would be unfair to block countries that are trying to make faster progress than they might otherwise make because of the prospect that is in front of them. Accession—soft power, as the noble Lord, Lord Hannay, rightly called it—is a great compass to direct countries in a helpful direction. Of course that compass route is corrected by having conditions; that is the point of them. I do not know that I can fully answer the point made by my noble friend Lord Giddens about political Europe. Of course the EU is an open market, which is one of its great benefits. But as a political entity it also helps to establish decent standards for conduct in many areas right across its remit. That must not be a formula that stultifies enterprise; that would not help. It is a powerful influence on the world. I have seen in discussions just last week at the EU-AU troika meeting in Mali that it is a force to argue for peace and security in places where it is very difficult. Next week, I hope that I am going to use the authority that the troika provides to see if we cannot get a more peaceful stand-off between Ethiopia and Eritrea. I do not know whether that will succeed, but I know that it is a powerful addition to the arguments that are available to us. That is political, that is global, and that is in all of our interests. It is not in Europe, it is not a state or quasi-state; we are acting together because we can add value by acting together. We should always consider on the occasions when we act as a separate nation state whether that is the best way. Those are the judgments that we must all make as part of the bigger judgment.
	I conclude with a thought that I borrow unashamedly from John Major, which may come as a surprise to noble Lords opposite. It is from his Guildhall speech made on 20 November 1995, almost exactly 10 years ago. He said that eastern and central Europe have been the cockpit of war through the centuries. But we now have an historic opportunity to bind them into a single market and into the democratic embrace of western Europe. That is why enlargement of the European Union remains a vital objective. Prime Minister Tony Blair has echoed that thought on more than one occasion. I echo it and I pay tribute to it today, because it is the right vision. In my father's generation, most young men saw Europe in uniform, and they often saw other Europeans down the sights of a gun. Our peace must extend—the peace that has been created throughout Europe and throughout the Balkans. They are on the path already, and they can travel far further on the path. I thank the noble Earl, Lord Dundee, for giving us the opportunity to explore how that can be achieved.